NEW CENTRAL BANK ACT CASES

1. G.R. No. 150886 Rural Bank of San Miguel, Inc. and Hilario P. Soriano V . Mone!ar" Board, BSP and P#I$ FACTS: Monetary Board, the governing body of Bangko Sentra ng !i i"ina#, i##$ed a Re#o $tion No% &'( "rohibiting R$ra Bank of San Mig$e , )n*% +RBSM, fro- doing banking b$#ine## in the !hi i""ine# in a**ordan*e .ith Se*tion /' of RA 01(/ +Ne. Centra Bank A*t, and " a*ing it# a##et# and iabi itie# $nder the re*eiver#hi" and de#ignation of !hi i""ine 2e"o#it )n#$ran*e Cor"oration +!2)C,% The re#o $tion i# ba#ed on the *o-"tro er#hi"3-onitoring re"ort *ond$*ted again#t RBSM #ho.ing a, that the bank i# $nab e to "ay it# iabi itie# a# they be*o-e d$e in the ordinary *o$r#e of b$#ine##, b, that it *annot *ontin$e in b$#ine## .itho$t invo ving "robab e o##e# to it# de"o#itor# and *reditor# and *, that it fai ed to inf$#e ade4$ate fre#h *a"ita .ithin given ti-e to " a*e the bank in a #o vent finan*ia *ondition% RBSM *ontend# that the Monentary Board and the Bangko Sentra ng !i i"ina# a*ted .ith grave ab$#e of di#*retion in i##$ing Re#o $tion No% &'( be*a$#e it i# bereft of any ba#i# *on#idering that no e5a-ination .a# *ond$*ted and that it# de*i#ion i# -ere y ba#ed fro- a *o-"tro er#hi" re"ort on the finan*ia *ondition and o"eration# of the bank% )SS6E: Whether or not Se*tion /' of RA 01(/ re4$ire# a *$rrent and *o-" ete e5a-ination of the bank before it *an be * o#ed and " a*ed $nder re*eiver#hi"% 7EL2: Se*tion /' of RA 01(/ "rovide#: SECT)8N /'% !ro*eeding# in Re*eiver#hi" and Li4$idation% 9 Whenever, $"on re"ort of the head of the #$"ervi#ing or e5a-ining de"art-ent, the Monetary Board find# that a bank or 4$a#i:bank: +a, i# $nab e to "ay it# iabi itie# a# they be*o-e d$e in the ordinary *o$r#e of b$#ine##: !rovided, That thi# #ha not in* $de inabi ity to "ay *a$#ed by e5traordinary de-and# ind$*ed by finan*ia "ani* in the banking *o--$nity; +b, ha# in#$ffi*ient rea i<ab e a##et#, a# deter-ined by the =BS!> to -eet it# iabi itie#; or +*, *annot *ontin$e in b$#ine## .itho$t invo ving "robab e o##e# to it# de"o#itor# or *reditor#; or +d, ha# .i f$ y vio ated a *ea#e and de#i#t order $nder Se*tion /0 that ha# be*o-e fina , invo ving a*t# or tran#a*tion# .hi*h a-o$nt to fra$d or a di##i"ation of the a##et# of the

in#tit$tion; in .hi*h *a#e#, the Monetary Board -ay #$--ari y and .itho$t need for "rior hearing forbid the in#tit$tion fro- doing b$#ine## in the !hi i""ine# and de#ignate the !hi i""ine 2e"o#it )n#$ran*e Cor"oration a# re*eiver of the banking in#tit$tion% Ba#ed fro- the above "rovi#ion, on y a ?re"ort of the head of the #$"ervi#ing or e5a-ining de"art-ent i# ne*e##ary@% The ter- Are"ortA *annot be *on#tr$ed a# #ynony-o$# .ith Ae5a-ination%A Fro- the .ord# $#ed in Se*tion /', it i# * ear that RA 01(/ no onger re4$ire# that an e5a-ination be -ade before the MB *an i##$e a * o#$re order% %. GR No. 1&8%08 $en!ral Bank '()lo"ee * ocia!ion, Inc V . Bangko Sen!ral ng Pili)ina and '+ecu!i,e Secre!ar" FACTS: !etitioner Centra Bank +no. BS!, E-" oyee# A##o*iation, )n*% fi ed a "etition for "rohibition again#t BS! and E5e*$tive Se*retary of the 8ffi*e of the !re#ident, to re#train re#"ondent# fro- f$rther i-" e-enting the a#t "rovi#o in Se*tion &( +*,, Arti* e )) of R%A% no% 01(/ +Ne. Centra Bank A*t,, on the gro$nd that it i# $n*on#tit$tiona % Art% )), Se*% &( +*, of R%A% 01(/ "rovide#: Se*tion &(% E5er*i#e of A$thority B )n the e5er*i#e of it# a$thority, the Monetary Board #ha : 555 555 555 +*, e#tab i#h a h$-an re#o$r*e -anage-ent #y#te- .hi*h #ha govern the #e e*tion, hiring, a""oint-ent, tran#fer, "ro-otion, or di#-i##a of a "er#onne % S$*h #y#te- #ha ai- to e#tab i#h "rofe##iona i#- and e5*e en*e at a eve # of the Bangko Sentra in a**ordan*e .ith #o$nd "rin*i" e# of -anage-ent% A *o-"en#ation #tr$*t$re, ba#ed on Cob eva $ation #t$die# and .age #$rvey# and #$bCe*t to the BoardD# a""rova , #ha be in#tit$ted a# an integra *o-"onent of the Bangko Sentra D# h$-an re#o$r*e deve o"-ent "rogra-: !rovided, That the Monetary Board #ha -ake it# o.n #y#te- *onfor- a# * o#e y a# "o##ib e .ith the "rin*i" e# "rovided for $nder Re"$b i* A*t No% 10(E =Sa ary Standardi<ation A*t>% Pro,ided, -o.e,er, /-a! co()en a!ion and .age !ruc!ure of e()lo"ee .-o e )o i!ion fall under alar" grade 10 and 1elo. -all 1e in accordance .i!- !-e ra!e )re cri1ed under Re)u1lic *c! No. 6258. =e-"ha#i# #$"" ied> The "etitioner "oint# o$t that the above:-entioned "rovi#ion i# vio ative of the e4$a "rote*tion * a$#e be*a$#e after it .a# ena*ted, the *harter# of the FS)S, LB!, 2B!, and SSS +and three other#, SBFFC, 7FC and !2)C, .ere a #o a-ended, b$t the "er#onne of the atter Fovern-ent Finan*ia )n#tit$tion# .ere a e5e-"ted fro- the *overage of Sa ary Standardi<ation La.% )SS6E:

Whether the a#t "aragra"h of Se*tion &( +*,, Arti* e )) of R%A% No% 01(/, r$n# afo$ of the *on#tit$tiona -andate that ?No "er#on #ha be% % % denied the e4$a "rote*tion of the a.#%@ 7EL2: The *ontin$ed o"eration and i-" e-entation of the a#t "rovi#io of Se*tion &( +*,, Arti* e )) of R%A% No% 01(/ i# $n*on#tit$tiona % The *on#tit$tiona ity of a #tat$te *annot, in every in#tan*e, be deter-ined by a -ere *o-"ari#on of it# "rovi#ion# .ith a"" i*ab e "rovi#ion# of the Con#tit$tion, #in*e the #tat$te -ay be *on#tit$tiona y va id a# a"" ied to one #et of fa*t# and inva id in it# a"" i*ation to another% A #tat$te va id at one ti-e -ay be*o-e void at another ti-e be*a$#e of a tered *ir*$-#tan*e#% Th$#, if a #tat$te in it# "ra*ti*a o"eration be*o-e# arbitrary or *onfi#*atory, it# va idity, even tho$gh affir-ed by a for-er adC$di*ation, i# o"en to in4$iry and inve#tigation in the ight of *hanged *ondition#% )n ight of the a*k of rea and #$b#tantia di#tin*tion# that .o$ d C$#tify the $ne4$a treat-ent bet.een the rank:and:fi e of BS! fro- the #even other FF)#, it i# * ear that the ena*t-ent of the #even #$b#e4$ent *harter# ha# rendered the *ontin$ed a"" i*ation of the *ha enged "rovi#o anathe-a to the e4$a "rote*tion of the a., and the #a-e #ho$ d be de* ared a# an o$t a.% 3. G.R. No. 16033& 4e!icia G. Miranda V . P-ili))ine #e)o i! In urance $or)ora!ion, BSP and Pri(e Sa,ing Bank FACTS: !etitioner Leti*ia Miranda .a# a de"o#itor of !ri-e Saving# Bank% She .ithdre. #$b#tantia a-o$nt# fro- her a**o$nt, b$t in#tead of *a#h #he o"ted to be i##$ed t.o +G, *ro##ed *a#hierH# *he*k% !etitioner de"o#ited the t.o *he*k# into her a**o$nt in another bank on the #a-e day, ho.ever, BS! #$#"ended * earing "rivi ege# of !ri-e Saving# Bank effe*tive G:'' "-, the day the *a#hierH# .a# i##$ed% The t.o *he*k# of the "etitioner .ere ret$rned to her $n"aid% The fo o.ing day, !ri-e Saving# Bank de* ared a bank ho iday% The BS! then " a*ed the bank $nder the re*eiver#hi" of the !2)C% !etitioner fi ed a *ivi a*tion for #$- of -oney in the RTC to re*over f$nd# fro- her $n"aid *he*k# again#t !ri-e Saving# Bank, !2)C and the BS!% )SS6ES: a% Whether the * ai- odged by the "etitioner i# a di#"$ted * ai- $nder Se*% /' of R%A% 01(/ +Ne. Centra Bank A*t,, and therefore $nder the C$ri#di*tion of the i4$idation *o$rt% b% Whether the re#"ondent# are #o idari y iab e to the "etitioner

7EL2: a% The * ai- odged by the "etitioner 4$a ifie# a# a di#"$ted * ai- #$bCe*t to the C$ri#di*tion of the i4$idation *o$rt% Reg$ ar *o$rt# do not have C$ri#di*tion over a*tion# fi ed by * ai-ant# again#t an in#o vent bank, $n e## there i# a * ear #ho.ing that the a*tion taken by the BS!, thro$gh the Monetary Board in the * o#$re of finan*ia in#tit$tion# .a# in e5*e## of C$ri#di*tion, or .ith grave ab$#e of di#*retion% A2i#"$ted * ai-#A refer to a * ai-#, .hether they be again#t the a##et# of the in#o vent bank, for #"e*ifi* "erfor-an*e, brea*h of *ontra*t, da-age#, or .hatever% Thi# di#"$ted * ai- #ho$ d therefore be odged in the i4$idation "ro*eeding# by the "etitioner a# *reditor, #in*e the * o#$re of !ri-e Saving# Bank ha# rendered a * ai-# #$b#i#ting at that ti-e -oot .hi*h *an be#t be thre#hed o$t by the i4$idation *o$rt and not the reg$ ar *o$rt#% b% The BS! #ho$ d not be he d iab e on the *ro##ed *a#hierD# *he*k# for it .a# not a "arty to the i##$an*e of the #a-e; nor *an it be he d iab e for i-"o#ing the #an*tion# on !ri-e Saving# Bank .hi*h indire*t y affe*ted Miranda, #in*e it i# -andated $nder Se*% /0 of R%A% No% 01(/ to a*t a**ording y% The BS!, thro$gh the Monetary Board .a# .e .ithin it# di#*retion to e5er*i#e thi# "o.er granted by a. to i##$e a re#o $tion #$#"ending the interbank * earing "rivi ege# of !ri-e Saving# Bank, having -ade a fa*t$a deter-ination that the bank had defi*ient *a#h re#erve# de"o#ited before the BS!% There i# no #ho.ing that the BS! ab$#ed thi# di#*retionary "o.er *onferred $"on it by a.% )n addition, *o:re#"ondent !2)C .a# i-" eaded a# a "arty: itigant on y in it# re"re#entative *a"a*ity a# the re*eiver3 i4$idator of !ri-e Saving# Bank% Both BS! and !2)C *annot therefore be he d dire*t y and #o idari y iab e for the "ay-ent of the t.o *a#hierD# *he*k#% So e iabi ity re#t# .ith !ri-e Saving# Bank% &. G.R. No. 16%336 Hilario P. Soriano V . Peo)le of !-e P-ili))ine , BSP, P#I$, Buan and 5onacier FACTS: 7i ario Soriano, "etitioner and "re#ident of R$ra Bank of San Mig$e +B$ a*an,, )n*% +RBSM,, fa #ified oan do*$-ent# by -aking it a""ear that the #"o$#e# Enri*o and A-e ia Car o# have an o$t#tanding oan of !EM .ith RBSM b$t had never a"" ied for nor re*eived #$*h oan% Fro- the etter of the 8ffi*e of S"e*ia )nve#tigation +8S), of the BS!, .hi*h .a# tran#-itted to the 28I, #tate# that 7i ario Soriano had ordered, fa*i itated, and re*eived the "ro*eed# of the oan and that the !EM oan had never been a$thori<ed by RBSMH# Board of 2ire*tor#% The etter atta*he# affidavit# .hi*h .o$ d #erve a# the ba#i# of fi ing *ri-ina *harge# again#t "etitioner%

Finding "robab e *a$#e, an infor-ation .a# fi ed *harging the "etitioner .ith e#tafa thro$gh fa #ifi*ation of *o--er*ia do*$-ent# and vio ation of Se*% E' of RA //0, a# a-ended by !2 &0J( for "rohibition again#t 28SR) oan#% !etitioner -oved to 4$a#h the#e infor-ation# on the gro$nd that the offi*er# of 8S), .ho .ere #ignatorie# to the etter:*o-" aint .ere not a$thori<ed to by BS! Fovernor to fi e the *o-" aint and that the *o--i##ion of e#tafa thr$ fa #ifi*ation of *o--er*ia do*$-ent# are inherent y in*on#i#tent .ith 28SR) La.% )SS6ES: a% Whether the *o-" aint *o-" ied .ith the -andatory re4$ire-ent# "rovided by the R$ e# of Co$rt and of "aragra"h# +*, and +d, of RA 01(/ +Ne. Centra Bank A*t, b% Whether a oan tran#a*tion .ithin the a-bit of the 28SR) La. *o$ d a #o be the #$bCe*t of E#tafa $nder the R!C 7EL2: a% The offen#e# for .hi*h Soriano .a# *harged .ere "$b i* *ri-e#, a$thority ho d# that it *an be initiated by ?any *o-"etent "er#on@ .ith "er#ona kno. edge of the a*t# *o--itted by the offender% Th$#, the .itne##e# .ho e5e*$ted the affidavit# * ear y fe .ithin the "$rvie. of ?any *o-"etent "er#on@ .ho -ay in#tit$te the *o-" aint for a "$b i* *ri-e% )t *o-" ie# .ith the re4$ire-ent# "rovided $nder the R$ e# of Co$rt and of "aragra"h# +*, and +d, of RA 01(/% b% The bank -oney +a-o$nting to !E -i ion, .hi*h *a-e to the "o##e##ion of "etitioner .a# -oney he d in tr$#t or ad-ini#tration by hi- for the bank, in hi# fid$*iary *a"a*ity a# the !re#ident of #aid bank% Thro$gh #$*h fra$d$ ent devi*e, "etitioner obtained the oan "ro*eed# and *onverted the #a-e% 6nder the#e *ir*$-#tan*e#, it *annot be #aid that "etitioner be*a-e the ega o.ner of the !E -i ion% Th$#, "etitioner re-ained the bankH# fid$*iary .ith re#"e*t to that -oney, .hi*h -ake# it *a"ab e of -i#a""ro"riation or *onver#ion in hi# hand#% A *harge for 28SR) vio ation in #$*h a #it$ation .herein the a**$#ed bank offi*er did not #e*$re a oan in hi# o.n na-e, b$t .a# a eged to have $#ed the na-e of another "er#on in order to indire*t y #e*$re a oan fro- the bank, Se*tion E/ of RA //0 read#: Section 83% No dire*tor or offi*er of any banking in#tit$tion #ha , either dire*t y or indirectly, for hi-#e f or a# the re"re#entative or agent of other#, borro. any of the de"o#it# of f$nd# of #$*h bank, nor shall he become a guarantor, indorser, or surety for loans from such bank to others, or in any -anner be an ob igor for -oney# borro.ed fro- the bank or oaned by it, e5*e"t .ith the .ritten a""rova of the -aCority of the dire*tor# of the bank, e5* $ding the dire*tor *on*erned% Any #$*h a""rova #ha be entered $"on the re*ord# of the *or"oration and a *o"y of #$*h entry #ha be tran#-itted forth.ith to the S$"erintendent of Bank#% The offi*e of any dire*tor or offi*er of a bank .ho vio ate# the "rovi#ion# of thi# #e*tion #ha i--ediate y be*o-e va*ant and the dire*tor or offi*er #ha be "$ni#hed by i-"ri#on-ent of not e## than one year

nor -ore than ten year# and by a fine of not e## than one tho$#and nor -ore than ten tho$#and "e#o#% 5 5 5 The "rohibition in Se*% E/ i# broad eno$gh to *over vario$# -ode# of borro.ing%

FENERAL BANK)NF LAW CASES

1. Gr. No. 138560 /-e $on olida!ed Bank and /ru ! $or)ora!ion V . $our! of *))eal and 4.$ #ia6 and $o()an" FACTS: !rivate re#"ondent L%C 2ia< and Co% +L%C% 2ia<, o"ened a #aving# a**o$nt .ith The Con#o idated Bank and Tr$#t Cor"oration, no. kno.n a# So idbank% Mer*ede# Ma*araya, *a#hier of L%C% 2ia<, .a# in#tr$*ted to de"o#it -oney .ith So idbank thro$gh their -e##enger )#-ae Ca a"re% Ca a"re then .ent to So idbank and "re#ented the t.o de"o#it # i"# and the "a##book to Te er No% 1% Sin*e the tran#a*tion took ti-e and Ca a"re had to -ade another de"o#it for L%C% 2ia< .ith A ied bank, he eft the "a##book .ith So idbank% When Ca a"re ret$rned to So idbank to retrieve the "a##book, Te er No% 1 infor-ed hi- that #o-ebody got the "a##book% Ca a"re then re"orted the in*ident% Fai ing to get ba*k the "a##book, L%C% 2ia<, thro$gh it# Chief E5e*$tive 8ffi*er, *a ed $" So idbank to #to" any tran#a*tion $#ing the #a-e "a##book $nti L%C% 2ia< *o$ d o"en a ne. a**o$nt% )t .a# on the #a-e day that L%C% 2ia< earned of the $na$thori<ed .ithdra.a a-o$nting to !/'',''' bearing the #ignat$re# of the a$thori<ed #ignatorie# of L%C% 2ia<% The #ignatorie#, ho.ever, denied #igning the .ithdra.a # i"% L%C% 2ia< thro$gh *o$n#e de-anded fro- So idbank the ret$rn of it# -oney ho.ever So idbank ref$#ed% )SS6E: Whether or not So idbank .i be he d iab e for neg igen*e by giving the "a##book to another "er#on% 7EL2: Se*tion G of the Fenera Banking La. +R%A% E0J&,, de* are# that the State re*ogni<e# the fid$*iary nat$re of banking that re4$ire# high #tandard# of integrity and "erfor-an*e% The fid$*iary nat$re of banking re4$ire# bank# to a##$-e a degree of di igen*e higher than that of a good gather of a fa-i y% So idbank i# neg igent for fai $re to *o-" y .ith it# fid$*iary d$ty% %. GR. No. 1%2&60 P-ili))ine Banking $or)ora!ion V $our! of *))eal and 4eonilo Marco

FACTS: Leoni o Mar*o# a eged y -ade a ti-e de"o#it .ith !hi i""ine Banking Cor"oration +Bank, in t.o o**a#ion#% The fir#t .a# on && Mar*h &JEG for the a-o$nt of !11K,EJ0%10 .hi*h the bank i##$ed a *orre#"onding re*ei"t and on &G Mar*h &JEG for !0KK,EJ0%10% The bank did not i##$e an offi*ia re*ei"t for the #e*ond ti-e de"o#it b$t it a*kno. edged a de"o#it of thi# a-o$nt thro$gh a etter:*ertifi*ation i##$ed by F oren*io B% !ag#a igan, a bank offi*ia % The ti-e de"o#it earned intere#t at &0L "er ann$- and had a -at$rity date "eriod of J' day#% When Mar*o# .anted to .ithdra. the a**$-$ ated intere#t# fro- hi# ti-e de"o#it# to b$y -ateria # for hi# b$#ine##, he .a# "er#$aded by !ag#a igan to kee" hi# de"o#it# inta*t and in#tead to o"en #evera do-e#ti* etter# of *redit% A -argina de"o#it of /'L i# re4$ired for Mar*o# to give and the re-aining 0'L of the etter# of *redit i# to be #e*$red again#t hi# ti-e de"o#it#% A# Mar*o# tr$#ted the bank, he #igned b ank "rinted for-# of the a"" i*ation for do-e#ti* etter# of *redit, tr$#t re*ei"t agree-ent# and "ro-i##ory note#% Mar*o# be ieved that he and the Bank be*a-e *reditor# and debtor# of ea*h other% Mar*o# e5"e*ted the Bank to off#et a$to-ati*a y a "ortion of hi# ti-e de"o#it# and the a**$-$ ated intere#t to *over the a-o$nt of the tr$#t re*ei"t agree-ent# .hi*h he i# ob iged to "ay% 7o.ever, the bank did not a"" y hi# ti-e de"o#it# and the a**$-$ ated intere#t to *over $" hi# debt% The bank * ai-# that hi# ti-e de"o#it# .ere a"" ied to another oan fro- the bank #$""o#ed y *overed by a "ro-i##ory note% Mar*o# fi ed a Co-" aint for S$- of Money .ith 2a-age# again#t the bank and "rayed to de* are the "ro-i##ory note void% )SS6E: Whether or not the bank i# iab e for off#etting the ti-e de"o#it# of Mar*o# .ith a fi*titio$# "ro-i##ory note% 7EL2: The bank i# iab e to Mar*o# for off#etting hi# ti-e de"o#it# .ith a fi*titio$# "ro-i##ory note% The bankH# fai $re to e5" ain the ab#en*e of the origina do*$-ent# and to -aintain a re*ord of the off#etting of thi# oan .ith the ti-e de"o#it# bring fore the bankH# di#-a fai $re to f$ fi it# fid$*iary d$ty% Se*tion G of Re"$b i* A*t No% E0J& +Fenera Banking La. of G''', e5"re## y i-"o#e# thi# fid$*iary d$ty on bank# .hen it de* are# that the State re*ogni<e# the Afid$*iary nat$re of banking that re4$ire# high #tandard# of integrity and "erfor-an*e%A

3. GR. No. 1528&5 P-ili))ine Na!ional Bank V . Nor(an 7. Pike FACTS:

The *a#e #te--ed fro- a *o-" aint fi ed by herein re#"ondent !ike again#t !hi i""ine Nationa Bank +!NB,% Co-" ainant !ike often trave to and fro- Ia"an a# gay entertainer% 7e o"ened a do ar #aving# a**o$nt .ith !NB .hi*h he .a# i##$ed a *orre#"onding "a##book% Before !ike eft for Ia"an, he ke"t the "a##book in#ide a *abinet $nder o*k and key in hi# ho-e% I$#t a fe. ho$r# after he ret$rned fro- Ia"an, he di#*overed that #o-e of hi# va $ab e# .ere -i##ing in* $ding the "a##book% 7e i--ediate y re"orted the in*ident to the "o i*e .hi*h ed to the arre#t and "ro#e*$tion of Mr% Ioy Man$e 2ava#o , ta ent -anager and *horeogra"her of the *o-" ainant% The *o-" ainant !ike a #o di#*overed that 2ava#o -ade t.o +G, $na$thori<ed .ithdra.a fro- hi# 2o ar #aving# a**o$nt% !ike .ent to !NB and "rote#ted the $na$thori<ed .ithdra.a and de-anded the ret$rn of the tota a-o$nt .ithdra.n on the gro$nd that he never a$thori<ed anybody to .ithdra. fro- hi# a**o$nt and that the #ignat$re# a""earing on the .ithdra.a # i"# .ere * ear y forgerie#% !NB ref$#ed to *redit #aid a-o$nt ba*k and in#tead the bank .rote hi- that it e5er*i#ed d$e di igen*e in hand ing the #aid a**o$nt% )t a #o *ontend# that d$e to verba in#tr$*tion# of !ike before he eft for Ia"an, to honor a "re:#igned .ithdra.a # i"# by another "er#on .ho ha""en# to be Mr% 2ava#o % )SS6E: Whether or not !NB i# neg igent for a o.ing the $na$thori<ed .ithdra.a % 7EL2: The degree of di igen*e re4$ired for bank# i# -ore than that of a good father or a fa-i y *on#idering that the b$#ine## of banking i# i-b$ed .ith "$b i* intere#t d$e to the nat$re of their f$n*tion#% The #tabi ity of bank# arge y de"end# on the *onfiden*e of the "eo" e in the hone#t and effi*ien*y of bank#% Th$#, the a. i-"o#e# on bank# a high degree of ob igation to treat the a**o$nt# of it# de"o#itor# .ith -eti*$ o$# *are, a .ay# having in -ind the fid$*iary nat$re of banking% Se*% G of R%A% E0J& -ake# a *ategori*a de* aration that the State re*ogni<e# the fid$*iary nat$re of banking that re4$ire# high #tandard# of integrity and "erfor-an*e%

&. G.R. No. 126&3& Bank of !-e P-ili))ine I land , . 4ife!i(e Marke!ing $or)ora!ion FACTS: Lifeti-e Marketing Cor"oration +LMC,, o"ened a *$rrent a**o$nt .ith the Bank of the !hi i""ine )# and# +B!),% )n thi# a**o$nt, the #a e# agent# of LMC .o$ d have to de"o#it their *o e*tion# or "ay-ent# to the atter% A# a b$#ine## "ra*ti*e, the regi#tered #a e# agent# or the Lifeti-e Ed$*ationa Con#$ tant# of LMC, *an get book# fro- the atter on *on#ign-ent ba#i#, then they .o$ d go dire*t y to their * ient# to #e % The#e agent# or *on#$ tant# .o$ d then "ay LMC by re-itting their "ay-ent# thro$gh any bran*he# of B!) and de"o#it the- to the a**o$nt of LMC% )t ha# been LMCH# "ra*ti*e to re4$ire it# agent# to "re#ent a va idated de"o#it # i" and, on that ba#i#, LMC .o$ d i##$e to the atter an a*kno. edge-ent re*ei"t%

A i*e La$re i# one of LMC#H ?Ed$*ationa Con#$ tant#@ or ?agent#@% 8n vario$# date#, A i*e La$re de"o#ited *he*k# to LMCH# a**o$nt at different bran*he# of B!)% Ba#ed on genera banking "ra*ti*e#, *an*e ation of de"o#it# or "ay-ent tran#a*tion# $"on re4$e#t by any de"o#itor or "ayor, re4$ire# the #$rrender of a *o"ie# of the de"o#it # i"# to the bank #o that no #$b#e4$ent * ai- or -i#re"re#entation -ay be -ade% 7o.ever, not.ith#tanding thi#, B!) te er# a**o--odated the verba re4$e#t# of A i*e La$re and her h$#band to rever#e #evera de"o#it# .itho$t retrieving or #$rrendering the d$" i*ate origina *o"ie# of the de"o#it # i"# to the bank% A i*e La$re "re#ented the -a*hine:va idated de"o#it # i"# to LMC .hi*h, on the #trength thereof, *on#idered her a**o$nt "aid% LMC even granted La$re #a e# di#*o$nt# and "ro-o "ri<e# on the de"o#it# #he -ade% 6"on di#*overy of thi# fra$d, LMC -ade 4$erie# fro- the B!) bran*he# invo ved .hi*h for-a y ad-itted that they *an*e ed, .itho$t kno. edge and *on#ent of LMC, the de"o#it tran#a*tion# -ade by A i*e and her h$#band ba#ed on y $"on the atterH# verba re4$e#t or re"re#entation% )SS6E: Whether or not B!) .i be he d iab e for fai $re to re4$ire the #$rrender of the -a*hine: va idated de"o#it # i"# before rever#ing the de"o#it tran#a*tion#% 7EL2: B!) fai ed to ob#erve the highe#t degree of *are in hand ing LMCH# a**o$nt% The banking ind$#try i# i-"re##ed .ith "$b i* intere#t% 8f "ara-o$nt i-"ortan*e thereto i# the tr$#t and *onfiden*e of the "$b i* in genera % A**ording y, the highe#t degree of di igen*e i# e5"e*ted, and high #tandard# of integrity and "erfor-an*e are re4$ired of it% By the nat$re of it# f$n*tion#, a bank i# $nder ob igation to treat the a**o$nt# of it# de"o#itor# .ith -eti*$ o$# *are, a .ay# having in -ind the fid$*iary nat$re of it# re ation#hi" .ith the-% The fid$*iary nat$re of banking i# no. en#hrined in Re"$b i* A*t No% E0J& or the Fenera Banking La. of G'''% Se*tion G thereof #"e*ifi*a y #ay# that the #tate re*ogni<e# the fid$*iary nat$re of banking that re4$ire# high #tandard# of integrity and "erfor-an*e% 5. G.R. No. 1&0&5& Bank of !-e P-ili))ine I land , . $a a Mon!e ori In!erna!ionale 4eonardo /. 7a1u! FACTS: ! aintiff CASA Monte##ori )nternationa o"ened an a**o$nt .ith defendant B!) .ith CASAH# !re#ident M#% Lebron a# one of it# a$thori<ed #ignatorie#% )n &JJ&, after *ond$*ting an inve#tigation, " aintiff di#*overed that nine +J, of it# *he*k# had been en*a#hed by a *ertain Sonny 2% Santo#% )t t$rned o$t that ?Sonny 2% Santo#@ .ith a**o$nt at B!)H# Freenbe t Bran*h .a# a fi*titio$# na-e $#ed by third "arty defendant Leonardo T% Mab$t .ho .orked a# e5terna a$ditor of CASA% Mab$t ad-itted that he forged the #ignat$re of M#% Lebron and en*a#hed the *he*k#% ! aintiff then fi ed a Co-" aint for Co e*tion .ith 2a-age# again#t the defendant bank ordering the rein#tate-ent of the tota a-o$nt of the *he*k# in the *$rrent and #aving# a**o$nt of the " aintiff%

)SS6E: Whether or not the bank i# neg igent in a o.ing "ay-ent $nder a forged #ignat$re% 7EL2: Sin*e banking b$#ine## i# i-"re##ed .ith "$b i* intere#t, of "ara-o$nt i-"ortan*e thereto i# the tr$#t and *onfiden*e of the "$b i* in genera % Con#e4$ent y, the highe#t degree of di igen*e i# e5"e*ted and high #tandard# of integrity and "erfor-an*e are even re4$ired of it% By the nat$re of it# f$n*tion#, a bank i# $nder ob igation to treat the a**o$nt# of it# de"o#itor# .ith -eti*$ o$# *are, a .ay# having in -ind the fid$*iary nat$re of their re ation#hi"% The bank fai ed to dete*t in#tan*e# of forgery% )t# neg igen*e *on#i#ted in the o-i##ion of that degree of di igen*e re4$ired of a bank% 6. G.R No. 1&1835 $en!ral Bank of !-e P-ili))ine , $i!"!ru ! Banking $or)ora!ion FACTS: Re#"ondent Citytr$#t Banking Cor"oration -aintained a de-and de"o#it .ith "etitioner Centra Bank of the !hi i""ine#, no. Bangko Sentra ng !i i"ina#% A# re4$ired, Citytr$#t f$rni#hed "etitioner .ith the na-e# and *orre#"onding #ignat$re# of it# offi*er# a$thori<ed to #ign *he*k# and the i#t of it# roving te er# .ith their *orre#"onding #ignat$re# a$thori<ed to .ithdra., #ign re*ei"t# and "erfor- other tran#a*tion# on it# beha f% Ro$n*eva F ore#, one of the re#"ondentH# roving te er, "re#ented for "ay-ent t.o +G, Citytr$#t *he*k# "ayab e to Citytr$#t to "etitionerH# Senior Te er, ) $-inada de a Cr$<% Both *he*k# .ere #igned and indor#ed by Citytr$#tH# a$thori<ed #ignatory:dra.er#% After the *he*k# .ere *ertified and verified, ) $-inda affi5ed her #ignat$re and #ta-"ed the *he*k# .ith the notation ?Re*eived !ay-ent@% She a#ked F ore# to #ign on the #"a*e "rovided above the notation b$t in#tead of #igning hi# na-e, F ore# #igned ?Ro#a$ro C% Cayabyab@ a fa*t ) $-inda fai ed to noti*e% ) $-inada then #ent *a#h tran#fer # i" and the *he*k# for verifi*ation and a""rova to "etitionerH# Ca#h 2e"art-ent, finding the #a-e in order again#t the #"e*i-en #ignat$re# "rovided by Citytr$#t, a""roved the *a#h tran#fer and "aid the *orre#"onding a-o$nt to F ore#% !etitioner debited the a-o$nt of the *he*k# fro- Citytr$#tH# de-and de"o#it a**o$nt% More than a year and nine -onth# ater, Citytr$#t #ent a etter a eging that the *he*k# .ere a ready *an*e ed be*a$#e it .a# #to en and de-anding "etitioner to re#tore the a-o$nt# *overed thereby to it# de-and de"o#it a**o$nt% !etitioner ho.ever did not heed the de-and% )SS6E: Whether or not Centra Bank i# iab e for en*a#hing and *harging the "ro*eed# of the *he*k# again#t the a**o$nt of Citytr$#t de#"ite the a*k of a$thority of ?Ro#a$ro C% Cayabyab@% 7EL2:

The a. i-"o#e# on bank# high #tandard# in vie. of the fid$*iary nat$re of banking% Se*tion G of Re"$b i* A*t No% E0J& +?RA E0J&@,, de* are# that the State re*ogni<e# the ?fid$*iary nat$re of banking that re4$ire# high #tandard# of integrity and "erfor-an*e%@ Thi# ne. "rovi#ion in the genera banking a., i# a #tat$tory affir-ation of S$"re-e Co$rt de*i#ion# ho ding that ?the bank i# $nder ob igation to treat the a**o$nt# of it# de"o#itor# .ith -eti*$ o$# *are, a .ay# having in -ind the fid$*iary nat$re of their re ation#hi"% The fid$*iary nat$re of banking re4$ire# bank# to a##$-e a degree of di igen*e higher than that of a good father of a fa-i y% 2. GR. No. 133120 *llied Banking $or)ora!ion V . 4i( Sio 8an, Me!ro)oli!an Bank *nd /ru ! $o., and Producer Bank FACTS: Re#"ondent Li- Sio Wan de"o#ited a -oney -arket " a*e-ent .ith A ied Banking Cor"oration +A ied Bank, for a ter- of /& day#% Before it# -at$rity, a *ertain "er#on * ai-ing to be Li- Sio Wan *a ed $" an offi*er of A ied Bank in#tr$*ting to "re:ter-inate the -oney -arket " a*e-ent and to i##$e a -anagerH# *he*k re"re#enting the "ro*eed# of the " a*e-ent .hi*h #ha be given to one 2eborah 2ee Santo# .ho .o$ d "i*k $" the *he*k% Thereafter, the -anagerH# *he*k .a# de"o#ited in the a**o$nt of Fi i"ina# Ce-ent Cor"oration +FCC, at Metro"o itan Bank and Tr$#t, Co% +Metrobank,, .ith the forged #ignat$re of Li- Sio Wan a# indor#er% A ied Bank f$nded the *he*k .itho$t *he*king the a$thenti*ity of Li- Sio WanH# indor#e-ent% Li- #io Wan di#*overed ater .hen #he .ent to A ied Bank to .ithdra. the -oney -arket " a*e-ent .hi*h #he -ade, #he .a# infor-ed that the " a*e-ent had been "re: ter-inated $"on her in#tr$*tion#% She denied giving any in#tr$*tion# and re*eiving the "ro*eed# thereof% She de#i#ted fro- f$rther *o-" aint# .hen #he .a# a##$red that the -oney .o$ d be re*overed% Rea i<ing the re*overy .o$ d not -ateria i<e, #he #ent a de-and etter a#king for the "ay-ent of the " a*e-ent% A ied bank ref$#ed to "ay * ai-ing that the atter had a$thori<ed the "re:ter-ination of the " a*e-ent and it# #$b#e4$ent re ea#e to Santo#% )SS6E: Whether or not A ied Bank i# neg igent in i##$ing the -anagerH# *he*k and in tran#-itting the #a-e to another "er#on .itho$t even a .ritten a$thori<ation% 7EL2: A ied Bank i# neg igent in i##$ing the -anagerH# *he*k% )n fa*t, A ied Bank did not even a#k for the *ertifi*ate eviden*ing the -oney -arket " a*e-ent or *a $" Li- Sio Wan to *onfirher in#tr$*tion#% Both a*tion# *o$ d have "revented the .ho e fra$d$ ent tran#a*tion fro$nfo ding% A iedH# neg igen*e -$#t be *on#idered a# the "ro5i-ate *a$#e of the re#$ ting o##%

A ied Bank fai ed to e5er*i#e the di igen*e d$e fro- a finan*ia in#tit$tion, the *he*k .o$ d not have been i##$ed and no o## of f$nd# .o$ d have re#$ ted% 8. G.R. No. 1560&0 * ocia!ed Bank , . Vicen!e Henr" /an GR. No. 153521 FACTS: Ni*ente 7enry Tan i# a b$#ine##-an and reg$ ar de"o#itor:*reditor of the A##o*iated Bank% So-eti-e in &JJ', he de"o#ited a "o#tdated 6C!B *he*k .ith the #aid bank in the a-o$nt of !&'&,'''%'' i##$ed to hi- by a *ertain Wi y Cheng -aking hi# ba an*e in the a-o$nt of !GJ0,'''% )n the #a-e date, he .ithdre. the #$- of !GK','''%'' eaving a ba an*e of !(0,0J/%K( $"on advi*e and in#tr$*tion of the bank that the *he*k i# * eared and ba*ked $" by #$ffi*ient f$nd#% A day after, he de"o#ited an a-o$nt of !(',''' -aking hi# e5i#ting ba an*e in the a-o$nt of !&'0,J0/%K( to a**o--odate the *he*k# .hi*h he i##$ed to hi# #evera "artner# .ith an aggregate a-o$nt of !0K,/(0%K'% 7o.ever, hi# #$"" ier# and b$#ine## "artner# .ent ba*k to hi- a eging that the *he*k# he i##$ed bo$n*ed for in#$ffi*ien*y of f$nd#% Tan, thr$ hi# a.yer, infor-ed the bank that he ha# ade4$ate and #$ffi*ient f$nd# to "ay the a-o$nt of the #$bCe*t *he*k#% 7o.ever, the bank did not bother to take "o#itive #te"#% Tan fi ed a Co-" aint for 2a-age# again#t the bank% The bank arg$ed that the 6C!B *he*k .a# di#honored and that it ha# a the right to debit the a-o$nt of the *he*k fro- hi# a**o$nt .hi*h .a# .ithdra.n by hi- "rior to it# * earing% )SS6E: Whether or not the bank fai ed to e5er*i#e the highe#t degree of *are for a o.ing Tan to .ithdra. fro- hi# a**o$nt the a-o$nt e5*eeding the fa*e va $e of the *he*k he de"o#ited not.ith#tanding the fa*t that the *he*k .a# not yet * eared% 7EL2: The bank a*ted in di#regard of the * earan*e re4$ire-ent of the banking #y#te- by a o.ing the .ithdra.a "rior to the * earing of the *he*k% The banking b$#ine## i# i-"re##ed .ith "$b i* intere#t% ACon#e4$ent y, the highe#t degree of di igen*e i# e5"e*ted, and high #tandard# of integrity and "erfor-an*e are even re4$ired of it% By the nat$re of it# f$n*tion#, a bank i# $nder ob igation to treat the a**o$nt# of it# de"o#itor# .ith -eti*$ o$# *are% The degree of di igen*e re4$ired of bank# i# -ore than that of a good father of a fa-i y .here the fid$*iary nat$re of their re ation#hi" .ith their de"o#itor# i# *on*erned% )ndeed, the banking b$#ine## i# ve#ted .ith the tr$#t and *onfiden*e of the "$b i*; hen*e the Aa""ro"riate #tandard of di igen*e -$#t be very high, if not the highe#t, degree of di igen*e@% 0. G.R. No. 153521 Bengue! Manage(en! $or). V $* FACTS:

!etitioner Beng$et Manage-ent Cor"% +BMC, entered a Loan Agree-ent and Mortgage Tr$#t )ndent$re +MT), .ith Ke""e Bank !hi i""ine#, )n*% +KB!), for a oan of !&J'M .hereby BMC -ortgage #evera ot# o*ated in A a-ino#, Lag$na and )ba, Oa-ba e#% For fai $re to "ay in f$ the in#ta -ent# d$e on the Loan agree-ent and Mortgage Tr$#t )ndent$re, KB!) fi ed an e5tra:C$di*ia fore* o#$re before RTC )ba, Oa-ba e#% A #i-i ar a"" i*ation for e5tra C$di*ia fore* o#$re .a# a #o fi ed .ith RTC San !ab o City% BMC then fi ed a ?Re4$e#t Not to Five 2$e Co$r#e to the A"" i*ation for E5tra:C$di*ia Fore* o#$re@ .ith RTC San !ab o City on the gro$nd that it i# in#$ffi*ient in for- and #$b#tan*e and that there i# no need to "ro*eed .ith the fore* o#$re of it# "ro"ertie# #it$ated in Lag$na be*a$#e it i# .i ing to e5e*$te a da*ion en "ago in " a*e of the -ortgaged "ro"ertie#% S$b#e4$ent y, BMC fi ed a ?Co-" ian*e and S$"" e-entary Fro$nd# to 2i#a""rove A"" i*ation for E5tra:C$di*ia Fore* o#$re of Rea E#tate Mortgage@ and a Me-orand$- *ontending that KB!) in* $ded $na$thori<ed *harge# and it did not *o-" y .ith it# ob igation to give BMC a 1': day gra*e "eriod% BMC f$rther * ai-ed that the MT) #e*$ring the "rin*i"a oan of !&J'M *annot be fore* o#ed be*a$#e it .a# not regi#tered .ith the Regi#ter of 2eed#% K!!)H# a"" i*ation for e5traC$di*ia fore* o#$re .a# ater on granted and fo$nd to be #$ffi*ient in forand #$b#tan*e% When the a$*tion #a e "ro*eeded, .ith KB!) a# the highe#t bidder, BMC a""ea ed to the CA to re#train the *on#o idation of tit e in the na-e of KB!) b$t .a# denied% BMC fi ed a -otion for re*on#ideration * ai-ing, a-ong other#, that Se*tion K0 of the Fenera Banking A*t +Re"$b i* A*t No% E0J&,, .hi*h red$*ed the "eriod of rede-"tion for e5tra: C$di*ia y fore* o#ed "ro"ertie# of C$ridi*a "er#on# fro- one year to B ?$nti , b$t not after, the regi#tration of the *ertifi*ate of fore* o#$re #a eP.hi*h in no *a#e #ha be -ore than three +/, -onth# after fore* o#$re, .hi*hever i# ear ier,@ i# $nd$ y di#*ri-inatory and therefore $n*on#tit$tiona % )SS6E: Whether or not the ne. a. +Fenra Banking La. of G''', abrogating the right to one year rede-"tion "eriod of *or"orate -ortgagor# i# $n*on#tit$tiona 7EL2: The re#o $tion of the *on#tit$tiona ity of Se*tion K0 of R%A No% E0J& .hi*h red$*ed the "eriod of rede-"tion of e5tra:C$di*ia y fore* o#ed "ro"ertie# of C$ridi*a "er#on# i# not the very i# -ota of the *ontrover#y% BMC i# not a##erting a ega right for .hi*h it i# entit ed to a C$di*ia deter-ination at thi# ti-e ina#-$*h a# it -ay not even be entit ed to redee- the fore* o#ed "ro"ertie#% 6nti an a*t$a *ontrover#y i# bro$ght to te#t the *on#tit$tiona ity of Re"$b i* A*t No% E0J&, the "re#$-"tion of va idity, .hi*h inhere# in every #tat$te, -$#t be a**orded to it%

10. G.R No. 168088 San 5ernando Rural Bank, Inc. V

Pa()anga 9(ni1u #e,elo)(en! $or). and #o(inic *:uino FACTS: !a-"anga 8-nib$# 2eve o"-ent Cor"oration +!82C, obtained a oan fro- San Fernando R$ra Bank, )n*% +SFRB), and Ma#anto R$ra Bank, )n*% .hi*h .a# #e*$red by a rea e#tate -ortgage over the "ar*e of and of for-er% The oan .a# eviden*ed by a "ro-i##ory note #igned by Federi*o Mendo<a and Ana#ta*io 2e Nera% The *ontra*t "rovided for e5traC$di*ia fore* o#$re $"on fai $re or ref$#a to "ay by the debtor#% When !82C fai ed to "ay it# oan, SFRB) e5traC$di*a y fore* o#ed the "ro"erty% The bank e-erged a# the .inning bidder and a Certifi*ate of Sa e .a# i##$ed on it# favor dated May J, G''& .hi*h #tate# that the "eriod of rede-"tion #ha e5"ire &:year after regi#tration in the Regi#ter of 2eed#% 8n May &&, G''G, !82C +.ith a$thority of it# board of dire*tor#,, e5e*$ted a deed of a##ign-ent in favor of 2o-ini* A4$ino over it# right to redee- the "ro"erty% 8n May GJ, G''G, A4$ino offered to redee- the "ro"erty fro- San Fernando R$ra Bank, )n*% b$t the atter reCe*ted the offer and de-anded a higher a-o$nt .hi*h in* $de# the oan of E i<a M% Farbe# +!82C "re#ident and da$ghter of Federi*o Mendo<a, .ho obtained a oan together .ith her h$#band .ith SFRB) .hi*h .a# a #o #igned by Federi*o Mendo<a a# *o:borro.er% 8n the fo o.ing day, A4$ino re-itted a Ca#hier Che*k to the E5:offi*io Sheriff a# rede-"tion -oney for the "ro"erty% The E5:offi*io Sheriff then infor-ed the bank thro$gh a etter that A4$ino had redee-ed the "ro"erty and re4$e#ted for the *o-"$tation of the *orre*t rede-"tion "ri*e% The bank #$b-itted it# rede-"tion "ri*e, .hi*h i# the #a-e a-o$nt it ear ier "re#ented% Thereafter, the E5:offi*e Sheriff *o-"$ted the rede-"tion "ri*e ba#ed on the Fenera Banking La. and R$ra Bank A*t% The adC$#t-ent .a# ater on "aid by A4$ino in .hi*h a Certifi*ate of Rede-"tion .a# i##$ed on hi# favor dated I$ne 0, G''G% The bank 4$e#tioned the *o-"$ted rede-"tion "ri*e% )t ater e5e*$ted an Affidavit of Con#o idation over the "ro"erty and a eged that !82C or any other "er#on3entity .ith the right of rede-"tion did not e5er*i#e their right to re"$r*ha#e .ithin &:year fro- I$ne 0, G''&% !etitioner *ontend# that, $nder the rea e#tate -ortgage e5e*$ted by !82C, the oan of #"o$#e# Farbe# .a# #e*$red by the "ro"erty *overed by #aid deed% 8n the otherhand, re#"ondent# averred that on y the oan of re#"ondent !82C .a# #e*$red by the -ortgage% 7EL2: The "etitioner i# granted a .rit of "o##e##ion over the "ro"erty% 7o.ever, the "artie# *o$ d have rai#ed the i##$e of the rede-"tion "eriod $nder the #e*ond "aragra"h of Se*tion K0 of R%A% No% E0J&% .hi*h read#: Not.ith#tanding A*t /&/(, C$ridi*a "er#on# .ho#e "ro"erty i# being #o d "$r#$ant to an e5traC$di*ia fore* o#$re, #ha have the right to redee- the "ro"erty in a**ordan*e .ith thi# "rovi#ion $nti , b$t not after, the regi#tration of the *ertifi*ate of fore* o#$re #a e .ith the a"" i*ab e Regi#ter of 2eed# .hi*h in no *a#e #ha be -ore than three +/, -onth# after fore* o#$re, .hi*hever i# ear ier% 8.ner# of "ro"erty that ha# been #o d in a fore* o#$re #a e "rior to the effe*tivity of thi# A*t #ha retain their rede-"tion right# $nti their e5"iration%

AMLA CASES
1. G.R. No. 120%81 Re). of !-e P-ili))ine , re)re en!ed 1" *n!i;Mone" 4audering $ouncil V . Gla go. $redi! and $ollec!ion Ser,ice , Inc. and $i!" !a!e Sa,ing Bank, Inc. FACTS: The Re"$b i* fi ed a *o-" aint in the RTC Mani a for *ivi forfeit$re of a##et# again#t the bank de"o#it# of F a#go. in City#tate Saving# Bank, )n*% +CSB), "$r#$ant to RA J&1' +Anti: Money La$ndering A*t of G''&,% After hearing on the a"" i*ation for i##$an*e of a .rit of "re i-inary inC$n*tion, the tria *o$rt i##$ed an order granting the i##$an*e of .rit of "re i-inary inC$n*tion% Mean.hi e, #$--on# to F a#go. .a# ret$rned ?$n#erved@ a# it *o$ d no onger be fo$nd at it# a#t kno.n addre##% The Re"$b i* fi ed a verified o-nib$# -otion for +a, i##$an*e of a ia# #$--on# and +b, eave of *o$rt to #erve #$--on# by "$b i*ation% 7o.ever, no -ention .a# -ade of the -otion for eave of *o$rt to #erve #$--on# by "$b i*ation% The tria *o$rt ar*hieved the *a#e a eged y for fai $re of the Re"$b i* to #erve the a ia# #$--on#% The Re"$b i* fi ed an e5 "arrte o-nib$# -otion to +a, rein#tate the *a#e and +b, re#o ve it# "ending -otion for eave of *o$rt to #erve #$--on# by "$b i*ation% The tria *o$rt granted the rein#tate-ent b$t i# did not re#o ve the -otion for eave of *o$rt to #erve #$--on# by "$b i*ation# de* aring that $nti and $n e## a ret$rn i# -ade on the a ia# #$--on#% A*ting on the a ia# #$--on#, the Re"$b i* re*eived a *o"y of the ret$rn #tating that the a ia# #$--on .a# ret$rned ?$n#erved@ a# F a#g o. .a# no onger ho ding offi*e at the given addre##% The Re"$b i* fi ed a -anife#tation and e5 "arte -otion to re#o ve it# -otion for eave of *o$rt to #erve #$--on# by "$b i*ation% The ne5t day, a *o"y of F a#go.H# ?Motion to 2i#-i## +By .ay of S"e*ia A""earan*e,@ .a# re*eived a eging that the +&, *o$rt had no C$ri#di*tion over it# "er#on a# #$--on# had not yet been #erved on it; +G, the *o-" aint .a# "re-at$re and #tated no *a$#e of a*tion a# there .a# #ti no *onvi*tion for e#tafa or other *ri-ina vio ation# i-" i*ating F a#go. and +/, there .a# fai $re to "ro#e*$te on the "art of the Re"$b i*% The Re"$b i* denied that it fai ed to "ro#e*$te the *a#e% )t *ontend# that the #$it .a# an a*tion in re- .here C$ri#di*tion over the "er#on of the defendant .a# not a "rere4$i#ite to *onfer C$ri#di*tion on the *o$rt% )t a##erted that "rior *onvi*tion for $n a.f$ a*tivity .a# not a "re*ondition to the fi ing of a *ivi forfeit$re *a#e and that it# *o-" aint a eged $ ti-ate fa*t# #$ffi*ient to e#tab i#h a *a$#e of a*tion% The tria *o$rt di#-i##ed the *a#e% )SS6E: Whether the *o-" aint for *ivi forfeit$re .a# *orre*t y di#-i##ed for fai $re to "ro#e*$te% 7EL2:

A *ri-ina *onvi*tion for an $n a.f$ a*tivity i# not a "rere4$i#ite for the in#tit$tion of a *ivi forfeit$re "ro*eeding% Stated other.i#e, a finding of g$i t for an $n a.f$ a*tivity i# not an e##entia e e-ent of *ivi forfeit$re% Se*tion 1 of RA J&1', a# a-ended, "rovide#: SEC% 1% Prosecution of Money Laundering. B +a, Any "er#on -ay be *harged .ith and *onvi*ted of both the offen#e of -oney a$ndering and the $n a.f$ a*tivity a# herein defined% +b, Any "ro*eeding re ating to the $n a.f$ a*tivity #ha be given "re*eden*e over the "ro#e*$tion of any offen#e or vio ation $nder thi# A*t .i!-ou! )re<udice !o !-e free<ing and o!-er re(edie )ro,ided% +e-"ha#i# #$"" ied, R$ e 1%& of the Revi#ed )-" e-enting R$ e# and Reg$ ation# of RA J&1', a# a-ended, #tate#: R$ e 1%&% Prosecution of Money Laundering B +a, Any "er#on -ay be *harged .ith and *onvi*ted of both the offen#e of -oney a$ndering and the $n a.f$ a*tivity a# defined $nder R$ e /+i, of the AMLA% +b, Any "ro*eeding re ating to the $n a.f$ a*tivity #ha be given "re*eden*e over the "ro#e*$tion of any offen#e or vio ation $nder the AMLA .i!-ou! )re<udice !o !-e a"" i*ation ex-parte by the AMLC to the Co$rt of A""ea # for a free<e order .ith re#"e*t to the -onetary in#tr$-ent or "ro"erty invo ved therein andre or! !o o!-er re(edie )ro,ided under !-e *M4*, !-e Rule of $our! and o!-er )er!inen! la. and rule % +e-"ha#i# #$"" ied, Fina y, Se*tion G0 of the R$ e of !ro*ed$re in Ca#e# of Civi Forfeit$re "rovide#: Se*% G0% o prior charge, pendency or con!iction necessary% B No )rior cri(inal c-arge, )endenc" of or con,ic!ion for an unla.ful ac!i,i!" or -oney a$ndering offen#e i nece ar" for !-e co((ence(en!or the re#o $tion of a "etition for *ivi forfeit$re% +e-"ha#i# #$"" ied, Th$#, regard e## of the ab#en*e, "enden*y or o$t*o-e of a *ri-ina "ro#e*$tion for the $n a.f$ a*tivity or for -oney a$ndering, an a*tion for *ivi forfeit$re -ay be #e"arate y and inde"endent y "ro#e*$ted and re#o ved% %. G.R. No. 12&6%0 Re)u1lic of !-e P-ili))ine , Re)re en!ed 1" *M4$ V . Hon. *n!onio 'ugenio, =r. Pan!aleon *l,are6 and 4ilia $-eng FACTS: After the Agan v% !)ATC8 r$ ing, a #erie# of inve#tigation# *on*erning the a.ard of the NA)A:/ *ontra*t# to !)ATC8 .ere $ndertaken by the 8-b$d#-an and the Co-" ian*e and )nve#tigation Staff +?C)S@, of the Anti:Money La$ndering Co$n*i +?AMLC@,% The 8SF .rote AMLC re4$e#ting AMLCH# a##i#tan*e in obtaining -ore eviden*e to *o-" ete y revea the finan*ia trai of *orr$"tion #$rro$nding the NA)A:/!roCe*t% The C)S *ond$*ted an inte igen*e databa#e #ear*h on the finan*ia tran#a*tion# of *ertain individ$a # invo ved in the a.ard, in* $ding A vare< +Chair-an of the !re:Q$a ifi*ation Bid# and A.ard# Te*hni*a Co--ittee,% By

thi# ti-e, A vare< had a ready been *harged by the 8-b$d#-an .ith vio ation of Se*tion /+I, of the Anti:Fraft and Corr$"t !ra*ti*e# A*t% The #ear*h revea ed that A vare< -aintained eight +E, bank a**o$nt# .ith #i5 +1, different bank#% The AMLC i##$ed a re#o $tion a$thori<ing it# E5e*$tive 2ire*tor to #ign and verify an a"" i*ation to in4$ire into the de"o#it# or inve#t-ent# of A vare< et a % and to a$thori<e the AMLC Se*retariat to *ond$*t an in4$iry on*e the RTC grant# the a"" i*ation% The rationa e for the re#o $tion .a# fo$nded on the finding# of the C)S that a-o$nt# .ere tran#ferred fro- a 7ong Kong bank a**o$nt to bank a**o$nt# in the !hi i""ine# -aintained by re#"ondent#% The Re#o $tion a #o noted that by a.arding the *ontra*t to !)ATC8 +de#"ite it# a*k of finan*ia *a"a*ity, A vare< vio ated Se*tion /+E, of the Anti:Fraft and Corr$"t !ra*ti*e# A*t% The Makati RTC rendered an 8rder granting the AMLC the a$thority to in4$ire and e5a-ine the #$bCe*t bank a**o$nt# of A vare<, et a % )n re#"on#e to a etter of S"e*ia !ro#e*$tor Ni a:)gna*io, AMLC i##$ed a Re#o $tion a$thori<ing it# E5e*$tive 2ire*tor to in4$ire into and e5a-ine the a**o$nt# of A vare<, !)ATC8, and #evera other entitie# invo ved in the n$ ified *ontra*t% AMLC fi ed an a"" i*ation before the Mani a RTC to in4$ire into the a**o$nt# a eged a# having been $#ed to fa*i itate *orr$"tion in the NA)A:/ !roCe*t% The e5 "arte a"" i*ation .a# granted and the Mani a RTC i##$ed a bank in4$iry order% A vare< a eged that he fort$ito$# y earned of the bank in4$iry order, .hi*h .a# i##$ed fo o.ing an e5 "arte a"" i*ation, and he arg$ed that nothing in the Anti:Money La$ndering A*t +?AMLA@, a$thori<ed the AMLC to #eek the a$thority to in4$ire into bank a**o$nt# e5 "arte% After #evera -otion#, -anife#tation#, order# and re#o $tion# the *a#e .ent $" to the S$"re-e Co$rt% A vare< et a %H# "o#ition: The AMLA, being a #$b#tantive "ena #tat$te, ha# no retroa*tive effe*t and the bank in4$iry order *o$ d not a"" y to de"o#it# or inve#t-ent# o"ened "rior to the effe*tivity of the AMLA +&0 8*tober G''&,% )SS6E: Whether or not an a"" i*ation for an order a$thori<ing in4$iry into or e5a-ination of bank a**o$nt# or inve#t-ent# $nder Se*tion && of AMLA e5:"arte in nat$re or one .hi*h re4$ire# noti*e and hearing% 7EL2: )t i# evident that Se*tion && doe# not #"e*ifi*a y a$thori<e, a# a genera r$ e, the i##$an*e ex parte of the bank in4$iry order% Se*tion && of AMLA read#: SEC. 11. Authority to Inquire into Bank Deposits. R Not.ith#tanding the "rovi#ion# of Re"$b i* A*t No% &K'(, a# a-ended, Re"$b i* A*t No% 1KG1, a# a-ended, Re"$b i* A*t No% E0J&, and other a.#, the AMLC -ay in4$ire into or e5a-ine any "arti*$ ar de"o#it or inve#t-ent .ith any banking in#tit$tion or non bank finan*ia in#tit$tion $"on order of any *o-"etent *o$rt in *a#e# of vio ation of thi# A*t, .-en i! -a 1een e !a1li -ed !-a! !-ere i )ro1a1le cau e !-a! !-e de)o i! or in,e !(en! are rela!ed !o an unla.ful ac!i,i!" a defined in Sec!ion 3>i? -ereof or a (one" laundering offen e under Sec!ion & -ereof, e+ce)! !-a! no cour! order -all 1e re:uired in ca e in,ol,ing unla.ful ac!i,i!ie defined in Sec!ion 3>i?1, >%? and >1%?. To en#$re *o-" ian*e .ith thi# A*t, the Bangko Sentra ng !i i"ina# +BS!, -ay in4$ire into or e5a-ine any de"o#it of inve#t-ent .ith any banking in#tit$tion or non:bank

finan*ia in#tit$tion .hen the e5a-ination i# -ade in the *o$r#e of a "eriodi* or #"e*ia e5a-ination, in a**ordan*e .ith the r$ e# of e5a-ination of the BS!% +E-"ha#i# #$"" ied, That the AMLA doe# not *onte-" ate ex parte "ro*eeding# in a"" i*ation# for bank in4$iry order# i# *onfir-ed by the "re#ent i-" e-enting r$ e# and reg$ ation# of the AMLA, "ro-$ gated $"on the "a##age of R%A% No% J&JK% With re#"e*t to free<e order# $nder Se*tion &', the i-" e-enting r$ e# do e5"re## y "rovide that the a"" i*ation# for free<e order# be fi ed ex parte, b$t no #i-i ar * earan*e i# granted in the *a#e of in4$iry order# $nder Se*tion &&% 3. G.R. No. 16&368;60 Peo)le of !-e P-ili))ine V . =o e)- '<erci!o;' !rada and Sandigan1a"an. FACTS: Being then !re#ident of the Re"$b i* of the !hi i""ine#, an infor-ation for " $nder .a# fi ed .ith the Sandiganbayan again#t re#"ondent E#trada, a-ong other a**$#ed% A #e"arate infor-ation for i ega $#e of a ia#, .a# ike.i#e fi ed again#t E#trada% At tria , the !eo" e "re#ented te#ti-onia and do*$-entary eviden*e to "rove the a egation# of the infor-ation# for " $nder, i ega $#e of a ia#, and "erC$ry% E#trada fi ed #e"arate de-$rrer to eviden*e for i ega $#e of a ia# and "erC$ry% 7i# de-$rrer to eviden*e for i ega $#e of a ia# .a# an*hored on the gro$nd that the $#e of a ia# on hi# #aving# a**o$nt together .ith do*$-entary tran#a*tion# $nder the a**o$nt na-e ?Io#e Ne arde@ .a# ega and "rohibited on y in ate G''& +before the ena*t-ent of AMLA, and that there i# no "roof of "$b i* and habit$a $#e of a ia# a# the banking do*$-ent# .hi*h, by their nat$re, are *onfidentia and *annot be revea ed .itho$t "ro"er "ro*ed$re#% The !eo" e o""o#ed the de-$rrer# thro$gh a Con#o idated 8""o#ition% The Sandiganbayan r$ ed that there i# an i ega $#e of a ia# on y if the $#e of the a ia# i# "$b i* and habit$a , the a ia# .a# $#ed in *onne*tion .ith the o"ening of tr$#t a**o$nt -ade d$ring the effe*tivity of R%A% No &K'(, a# a-ended, and "rior to the ena*t-ent of R%A% No% J&1' +AMLA,% )SS6E: Whether or not the *o$rt erred and ab$#ed it# di#*retion in di#-i##ing the *a#e that the ho ding of the a ia# ?Io#e Ne arde@ .a# a o.ab e $nder banking r$ e# before the ena*t-ent of RA J&1'% 7EL2: The $#e of a ia# .a# "erfe*t y ega % The $#e of an a ia# .ithin the *onte5t of a bank tran#a*tion i# "rote*ted by the #e*re*y "rovi#ion of R%A% No% &K'(, and th$# o$t#ide the *overage of CA No% &KG $nti the "a##age into a. of R%A No% J&1' .hi*h "rovide# for ab#o $te "rohibition again#t the $#e of anony-o$# a**o$nt#, a**o$nt# $nder fi*titio$# na-e# and a other #i-i ar a**o$nt%