G.R. No.

170281 January 18, 2008

REPUBLIC OF THE PHILIPPINES, represented by the ANTI-MONEY LAUNDERING

COUNCIL, petitioner,
vs.
GLASGOW CREDIT AND COLLECTION SERVICES, INC. and CITYSTATE SAVINGS BANK,
INC., respondents.

FACTS:

On July 18, 2003, petitioner filed a complaint for civil forfeiture of assets with the RTC of Manila against the
bank deposit in an account number CS-005-10-000121-5, maintained by the respondent. The case was filed
pursuant to RA 9160 or the Anti-Money Laundering Act of 2001. Three days after, the RTC of Manila issued a
72-hour TRO and a writ of preliminary injunction followed. Meanwhile, summons to the respondent was
returned "unserved" as it could no longer be found at its last known address.

Petitioner filed a verified omnibus motion for a.) issuance of alias summons and b) leave of court to serve
summons by publication. No mention was made of the motion for leave of court to serve summons by
publication to which the court archived the case for its failure to serve alias summons.

On January 30, 2004, the trial court archived the case for failure of the Republic to serve alias summons. The
Republic filed an ex parte omnibus motion to reinstate the case and resolve the motion for leave of court to
serve summons by publication. The trial court then ordered the reinstatement of the case directing the Republic
to serve the alias summons to Glasgow and CSBI within 15 days. A month later, the petitioner received a copy
of the sheriff's return stating that the alias summons was returned "unserved".

In 2005, the petitioner filed a manifestation and ex parte motion to resolve its motion for leave of court to serve
summons by publication. The OSG received a copy of GLASGOW's motion to dismiss by way of special
appearance alleging that:

1) the court had no jurisdiction over its person as summons had not yet been served,
2) the complaint was premature and stated no cause of action and
3) there was failure to prosecute on the part of the Republic

On October 17, 2005, the trial court dismissed the case on the grounds of

1) Improper venue
2) Insufficiency of the complaint in form and substance; and
3) Failure to prosecute

Hence, the petitioner filed a petition for review.

ISSUE

1. WON the complaint for civil forfeiture was correctly dismissed on grounds of improper venue,
insufficiency in form and substance and failure to prosecute

2. WON the complaint for civil forfeiture was properly instituted

RULING

1. No

The Complaint Was Filed In The Proper Venue

Under Section 3, Title II of the Rule of Procedure in Cases of Civil Forfeiture, the venue of civil forfeiture cases
is any RTC of the judicial region where the monetary instrument, property or proceeds representing, involving,
or relating to an unlawful activity or to a money laundering offense are located. Pasig City, where the account
sought to be forfeited in this case is situated, is within the National Capital Judicial Region (NCJR). Clearly,
the complaint for civil forfeiture of the account may be filed in any RTC of the NCJR. Since the RTC Manila
is one of the RTCs of the NCJR, it was a proper venue of the Republic’s complaint for civil forfeiture of
Glasgow’s account.

But inasmuch as Glasgow never questioned the venue of the Republic’s complaint for civil forfeiture against
it, how could the trial court have dismissed the complaint for improper venue? In Dacoycoy v. Intermediate
Appellate Court (reiterated in Rudolf Lietz Holdings, Inc. v. Registry of Deeds of Parañaque City), this Court
ruled:

The motu proprio dismissal of petitioner’s complaint by [the] trial court on the ground of improper
venue is plain error….

At any rate, the trial court was a proper venue.

The Complaint Was Sufficient In Form And Substance

In a motion to dismiss for failure to state a cause of action, the focus is on the sufficiency, not the veracity, of
the material allegations. The determination is confined to the four corners of the complaint and nowhere else.

The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged,
the court could render a valid judgment upon the same in accordance with the prayer of the complaint.

In this connection, Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides:

Sec. 4. Contents of the petition for civil forfeiture. - The petition for civil forfeiture shall be verified
and contain the following allegations:

(a) The name and address of the respondent;

(b) A description with reasonable particularity of the monetary instrument, property, or

proceeds, and their location; and

(c) The acts or omissions prohibited by and the specific provisions of the Anti-Money
Laundering Act, as amended, which are alleged to be the grounds relied upon for the
forfeiture of the monetary instrument, property, or proceeds; and

[(d)] The reliefs prayed for.

Here, the verified complaint of the Republic contained the following allegations:

(a) the name and address of the primary defendant therein, Glasgow; 15

(b) a description of the proceeds of Glasgow’s unlawful activities with particularity, as well as the
location thereof, account no. CA-005-10-000121-5 in the amount of P21,301,430.28 maintained with
CSBI;

(c) the acts prohibited by and the specific provisions of RA 9160, as amended, constituting the
grounds for the forfeiture of the said proceeds. In particular, suspicious transaction reports showed
that Glasgow engaged in unlawful activities of estafa and violation of the Securities Regulation Code;
the proceeds of the unlawful activities were transacted and deposited with CSBI thereby making them
appear to have originated from legitimate sources; as such, Glasgow engaged in money laundering;
and the AMLC subjected the account to freeze order and
 (d) the reliefs prayed for, namely, the issuance of a TRO or writ of preliminary injunction and the
forfeiture of the account in favor of the government as well as other reliefs just and equitable under
the premises.

There Was No Failure To Prosecute

While there was admittedly a delay in the proceeding, it could not be entirely or primarily ascribed to the
Republic. That Glasgow’s whereabouts could not be ascertained was not only beyond the Republic’s control, it
was also attributable to Glasgow which left its principal office address without informing the Securities and
Exchange Commission or any official regulatory body (like the Bureau of Internal Revenue or the Department
of Trade and Industry) of its new address. Moreover, as early as October 8, 2003, the Republic was already
seeking leave of court to serve summons by publication. Given these circumstances, how could the Republic be
faulted for failure to prosecute the complaint for civil forfeiture?

2. Yes

RA 9160, as amended, and its implementing rules and regulations lay down 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.

It is the preliminary seizure of the property in question which brings it within the reach of the judicial process. It
is actually within the court’s possession when it is submitted to the process of the court. The injunctive writ
issued on August 8, 2003 removed account no. CA-005-10-000121-5 from the effective control of either
Glasgow or CSBI or their representatives or agents and subjected it to the process of the court.

Since account no. CA-005-10-000121-5 of Glasgow in CSBI was (1) covered by several suspicious transaction
reports and (2) placed under the control of the trial court upon the issuance of the writ of preliminary injunction,
the conditions provided in Section 12(a) of RA 9160, as amended, were satisfied. Hence, the Republic,
represented by the AMLC, properly instituted the complaint for civil forfeiture.

WHEREFORE, the petition was GRANTED. The order of the Regional Trial Court of Manila, was SET
ASIDE. The motion to dismiss of Glasgow Credit and Collection Services, Inc. was DENIED. And the complaint
for forfeiture of the Republic of the Philippines, represented by the Anti-Money Laundering Council,
was REINSTATED.