Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
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.
DECISION
CORONA, J.:
This is a petition for review1 of the order2 dated October 27, 2005
of the Regional Trial Court (RTC) of Manila, Branch 47, dismissing
the complaint for forfeiture3 filed by the Republic of the Philippines,
represented by the Anti-Money Laundering Council (AMLC)
against respondents Glasgow Credit and Collection Services, Inc.
(Glasgow) and Citystate Savings Bank, Inc. (CSBI).
On July 18, 2003, the Republic filed a complaint in the RTC Manila
for civil forfeiture of assets (with urgent plea for issuance of
temporary restraining order [TRO] and/or writ of preliminary
injunction) against the bank deposits in account number CA-005-
10-000121-5 maintained by Glasgow in CSBI. The case, filed
pursuant to RA 9160 (the Anti-Money Laundering Act of 2001), as
amended, was docketed as Civil Case No. 03-107319.
Acting on the Republics urgent plea for the issuance of a TRO, the
executive judge4 of RTC Manila issued a 72-hour TRO dated July
21, 2003. The case was thereafter raffled to Branch 47 and the
hearing on the application for issuance of a writ of preliminary
injunction was set on August 4, 2003.
After hearing, the trial court (through then Presiding Judge Marivic
T. Balisi-Umali) issued an order granting the issuance of a writ of
preliminary injunction. The injunctive writ was issued on August 8,
2003.
Meanwhile, summons to Glasgow was returned "unserved" as it
could no longer be found at its last known address.
On October 8, 2003, the Republic filed a verified omnibus motion
for (a) issuance of alias summons and (b) leave of court to serve
summons by publication. In an order dated October 15, 2003, the
trial court directed the issuance of alias summons. However, no
mention was made of the motion for leave of court to serve
summons by publication.
In an order dated January 30, 2004, the trial court archived the
case allegedly for failure of the Republic to serve
the alias summons. The Republic filed an ex parte omnibus motion
to (a) reinstate the case and (b) resolve its pending motion for
leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the
reinstatement of the case and directed the Republic to serve
the alias summons on Glasgow and CSBI within 15 days.
However, it did not resolve the Republics motion for leave of court
to serve summons by publication declaring:
Until and unless a return is made on the alias summons,
any action on [the Republics] motion for leave of court to
serve summons by publication would be untenable if not
premature.
On July 12, 2004, the Republic (through the Office of the Solicitor
General [OSG]) received a copy of the sheriffs return dated June
30, 2004 stating that the alias summons was returned "unserved"
as Glasgow was no longer holding office at the given address
since July 2002 and left no forwarding address.
Meanwhile, the Republics motion for leave of court to serve
summons by publication remained unresolved. Thus, on August
11, 2005, the Republic filed a manifestation and ex parte motion to
resolve its motion for leave of court to serve summons by
publication.
On August 12, 2005, the OSG received a copy of Glasgows
"Motion to Dismiss (By Way of Special Appearance)" dated August
11, 2005. It alleged that (1) the court had no jurisdiction over its
person as summons had not yet been served on it; (2) the
complaint was premature and stated no cause of action as there
was still no conviction for estafa or other criminal violations
implicating Glasgow and (3) there was failure to prosecute on the
part of the Republic.
The Republic opposed Glasgows motion to dismiss. It contended
that its suit was an action quasi in rem where jurisdiction over the
person of the defendant was not a prerequisite to confer
jurisdiction on the court. It asserted that prior conviction for
unlawful activity was not a precondition to the filing of a civil
forfeiture case and that its complaint alleged ultimate facts
sufficient to establish a cause of action. It denied that it failed to
prosecute the case.
On October 27, 2005, the trial court issued the assailed order. It
dismissed the case on the following grounds: (1) improper venue
as it should have been filed in the RTC of Pasig where CSBI, the
depository bank of the account sought to be forfeited, was located;
(2) insufficiency of the complaint in form and substance and (3)
failure to prosecute. It lifted the writ of preliminary injunction and
directed CSBI to release to Glasgow or its authorized
representative the funds in CA-005-10-000121-5.
Raising questions of law, the Republic filed this petition.
On November 23, 2005, this Court issued a TRO restraining
Glasgow and CSBI, their agents, representatives and/or persons
acting upon their orders from implementing the assailed October
27, 2005 order. It restrained Glasgow from removing, dissipating or
disposing of the funds in account no. CA-005-10-000121-5 and
CSBI from allowing any transaction on the said account.
The petition essentially presents the following issue: whether the
complaint for civil forfeiture was correctly dismissed on grounds of
improper venue, insufficiency in form and substance and failure to
prosecute.
The Court agrees with the Republic.
The Complaint Was Filed
In The Proper Venue
In its assailed order, the trial court cited the grounds raised by
Glasgow in support of its motion to dismiss:
1. That this [c]ourt has no jurisdiction over the person of
Glasgow considering that no [s]ummons has been served
upon it, and it has not entered its appearance voluntarily;
2. That the [c]omplaint for forfeiture is premature because of
the absence of a prior finding by any tribunal that Glasgow
was engaged in unlawful activity: [i]n connection therewith[,]
Glasgow argues that the [c]omplaint states no cause of
action; and
3. That there is failure to prosecute, in that, up to now,
summons has yet to be served upon Glasgow.5
But inasmuch as Glasgow never questioned the venue of the
Republics complaint for civil forfeiture against it, how could the trial
court have dismissed the complaint for improper venue?
In Dacoycoy v. Intermediate Appellate Court6 (reiterated in Rudolf
Lietz Holdings, Inc. v. Registry of Deeds of Paraaque City),7 this
Court ruled:
The motu proprio dismissal of petitioners complaint by
[the] trial court on the ground of improper venue is plain
error. (emphasis supplied)
At any rate, the trial court was a proper venue.
On November 15, 2005, this Court issued A.M. No. 05-11-04-SC,
the Rule of Procedure in Cases of Civil Forfeiture, Asset
Preservation, and Freezing of Monetary Instrument, Property, or
Proceeds Representing, Involving, or Relating to an Unlawful
Activity or Money Laundering Offense under RA 9160, as
amended (Rule of Procedure in Cases of Civil Forfeiture). The
order dismissing the Republics complaint for civil forfeiture of
Glasgows account in CSBI has not yet attained finality on account
of the pendency of this appeal. Thus, the Rule of Procedure in
Cases of Civil Forfeiture applies to the Republics
complaint.8 Moreover, Glasgow itself judicially admitted that the
Rule of Procedure in Cases of Civil Forfeiture is "applicable to the
instant case."9
Section 3, Title II (Civil Forfeiture in the Regional Trial Court) of the
Rule of Procedure in Cases of Civil Forfeiture provides:
Sec. 3. Venue of cases cognizable by the regional trial
court. A petition for civil forfeiture shall be filed in any
regional trial court of the judicial region where the
monetary instrument, property or proceeds
representing, involving, or relating to an unlawful
activity or to a money laundering offense are
located; provided, however, that where all or any portion of
the monetary instrument, property or proceeds is located
outside the Philippines, the petition may be filed in the
regional trial court in Manila or of the judicial region where
any portion of the monetary instrument, property, or
proceeds is located, at the option of the petitioner.
(emphasis supplied)
Under Section 3, Title II of the Rule of Procedure in Cases of Civil
Forfeiture, therefore, the venue of civil forfeiture cases is any RTC
of the judicial region where the monetary instrument, property or
proceeds representing, involving, or relating to an unlawful activity
or to a money laundering offense are located. Pasig City, where
the account sought to be forfeited in this case is situated, is within
the National Capital Judicial Region (NCJR). Clearly, the complaint
for civil forfeiture of the account may be filed in any RTC of the
NCJR. Since the RTC Manila is one of the RTCs of the NCJR,10 it
was a proper venue of the Republics complaint for civil forfeiture of
Glasgows account.
The Complaint Was Sufficient In Form And Substance
In the assailed order, the trial court evaluated the Republics
complaint to determine its sufficiency in form and substance:
At the outset, this [c]ourt, before it proceeds, takes the
opportunity to examine the [c]omplaint and determine
whether it is sufficient in form and substance.
Before this [c]ourt is a [c]omplaint for Civil Forfeiture of
Assets filed by the [AMLC], represented by the Office of the
Solicitor General[,] against Glasgow and [CSBI] as
necessary party. The [c]omplaint principally alleges the
following:
(a) Glasgow is a corporation existing under the laws of the
Philippines, with principal office address at Unit 703,
7th Floor, Citystate Center [Building], No. 709 Shaw
Boulevard[,] Pasig City;
(b) [CSBI] is a corporation existing under the laws of the
Philippines, with principal office at Citystate Center Building,
No. 709 Shaw Boulevard, Pasig City;
(c) Glasgow has funds in the amount of P21,301,430.28
deposited with [CSBI], under CA 005-10-000121-5;
(d) As events have proved, aforestated bank account is
related to the unlawful activities of Estafa and violation of
Securities Regulation Code;
(e) The deposit has been subject of Suspicious Transaction
Reports;
(f) After appropriate investigation, the AMLC issued
Resolutions No. 094 (dated July 10, 2002), 096 (dated July
12, 2002), 101 (dated July 23, 2002), and 108 (dated
 August 2, 2002), directing the issuance of freeze orders
against the bank accounts of Glasgow;
(g) Pursuant to said AMLC Resolutions, Freeze Orders
Nos. 008-010, 011 and 013 were issued on different dates,
addressed to the concerned banks;
(h) The facts and circumstances plainly showing that
defendant Glasgows bank account and deposit are related
to the unlawful activities of Estafa and violation of Securities
Regulation Code, as well as to a money laundering offense
[which] [has] been summarized by the AMLC in its
Resolution No. 094; and
(i) Because defendant Glasgows bank account and
deposits are related to the unlawful activities of Estafa and
violation of Securities Regulation Code, as well as [to]
money laundering offense as aforestated, and being the
subject of covered transaction reports and eventual freeze
orders, the same should properly be forfeited in favor of the
government in accordance with Section 12, R.A. 9160, as
amended.11
In a motion to dismiss for failure to state a cause of action, the
focus is on the sufficiency, not the veracity, of the material
allegations.12 The determination is confined to the four corners of
the complaint and nowhere else.13
In a motion to dismiss a complaint based on lack of cause
of action, the question submitted to the court for
determination is the sufficiency of the allegations made in
the complaint to constitute a cause of action and not
whether those allegations of fact are true, for said motion
must hypothetically admit the truth of the facts alleged in the
complaint.
The test of the sufficiency of the facts alleged in the
complaint is whether or not, admitting the facts alleged,
the court could render a valid judgment upon the same
in accordance with the prayer of the
complaint.14 (emphasis ours)
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 Glasgows 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 (under Section 3(i)(9) and (13), RA 9160,
as amended); the proceeds of the unlawful activities were
transacted and deposited with CSBI in account no. CA-005-
10-000121-5 thereby making them appear to have
originated from legitimate sources; as such, Glasgow
engaged in money laundering (under Section 4, RA 9160,
as amended); and the AMLC subjected the account to
freeze order and
(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.
The form and substance of the Republics complaint substantially
conformed with Section 4, Title II of the Rule of Procedure in
Cases of Civil Forfeiture.
Moreover, Section 12(a) of RA 9160, as amended,
provides:
SEC. 12. Forfeiture Provisions.
(a) Civil Forfeiture. When there is a covered transaction
report made, and the court has, in a petition filed for the
purpose ordered seizure of any monetary instrument or
property, in whole or in part, directly or indirectly, related to
said report, the Revised Rules of Court on civil forfeiture
shall apply.
In relation thereto, Rule 12.2 of the Revised Implementing Rules
and Regulations of RA 9160, as amended, states:
RULE
Forfeiture Provisions
xxx xxx xxx
Rule 12.2. When Civil Forfeiture May be Applied. When
there is a SUSPICIOUS TRANSACTION REPORT OR A
COVERED TRANSACTION REPORT DEEMED
SUSPICIOUS AFTER INVESTIGATION BY THE AMLC,
and the court has, in a petition filed for the purpose, ordered
the seizure of any monetary instrument or property, in
whole or in part, directly or indirectly, related to said report,
the Revised Rules of Court on civil forfeiture shall apply.
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.16 It is actually within the
courts possession when it is submitted to the process of the
court.17 The injunctive writ issued on August 8, 2003 removed
account no. CA-005-10-000121-5 from the effective control of
either Glasgow or CSBI or their representatives or agents and
subjected it to the process of the court.
Since account no. CA-005-10-000121-5 of Glasgow in CSBI was
(1) covered by several suspicious transaction reports and (2)
placed under the control of the trial court upon the issuance of the
writ of preliminary injunction, the conditions provided in Section
12(a) of RA 9160, as amended, were satisfied. Hence, the
Republic, represented by the AMLC, properly instituted the
complaint for civil forfeiture.
12
Whether or not there is truth in the allegation that account no. CA-
005-10-000121-5 contains the proceeds of unlawful activities is an
evidentiary matter that may be proven during trial. The complaint,
however, did not even have to show or allege that Glasgow had
been implicated in a conviction for, or the commission of, the
unlawful activities of estafa and violation of the Securities
Regulation Code.
A criminal conviction for an unlawful activity is not a prerequisite for
the institution of a civil forfeiture proceeding. Stated otherwise, a
finding of guilt for an unlawful activity is not an essential element of
civil forfeiture.
Section 6 of RA 9160, as amended, provides:
SEC. 6. Prosecution of Money Laundering.
(a) Any person may be charged with and convicted of both
the offense of money laundering and the unlawful activity as
herein defined.
(b) Any proceeding relating to the unlawful activity shall be
given precedence over the prosecution of any offense or
violation under this Act without prejudice to the freezing
and other remedies provided. (emphasis supplied)
Rule 6.1 of the Revised Implementing Rules and Regulations of
RA 9160, as amended, states:
Rule 6.1. Prosecution of Money Laundering
(a) Any person may be charged with and convicted of both
the offense of money laundering and the unlawful activity as
defined under Rule 3(i) of the AMLA.
(b) Any proceeding relating to the unlawful activity shall be
given precedence over the prosecution of any offense or
violation under the AMLA without prejudice to
the application ex-parte by the AMLC to the Court of
Appeals for a freeze order with respect to the monetary
instrument or property involved therein andresort to other
remedies provided under the AMLA, the Rules of Court
and other pertinent laws and rules. (emphasis supplied)
Finally, Section 27 of the Rule of Procedure in Cases of Civil
Forfeiture provides:
Sec. 27. No prior charge, pendency or conviction
necessary. No prior criminal charge, pendency of or
conviction for an unlawful activity or money laundering
offense is necessary for the commencementor the
resolution of a petition for civil forfeiture. (emphasis
supplied)
Thus, regardless of the absence, pendency or outcome of a
criminal prosecution for the unlawful activity or for money
laundering, an action for civil forfeiture may be separately and
independently prosecuted and resolved.
There Was No Failure
To Prosecute
The trial court faulted the Republic for its alleged failure to
prosecute the case. Nothing could be more erroneous.
Immediately after the complaint was filed, the trial court ordered its
deputy sheriff/process server to serve summons and notice of the
hearing on the application for issuance of TRO and/or writ of
preliminary injunction. The subpoena to Glasgow was, however,
returned unserved as Glasgow "could no longer be found at its
given address" and had moved out of the building since August 1,
2002.
Meanwhile, after due hearing, the trial court issued a writ of
preliminary injunction enjoining Glasgow from removing,
dissipating or disposing of the subject bank deposits and CSBI
from allowing any transaction on, withdrawal, transfer, removal,
dissipation or disposition thereof.
As the summons on Glasgow was returned "unserved," and
considering that its whereabouts could not be ascertained despite
diligent inquiry, the Republic filed a verified omnibus motion for (a)
issuance of alias summons and (b) leave of court to serve
summons by publication on October 8, 2003. While the trial court
issued an aliassummons in its order dated October 15, 2003, it
kept quiet on the prayer for leave of court to serve summons by
publication.
Subsequently, in an order dated January 30, 2004, the trial court
archived the case for failure of the Republic to cause the service
of alias summons. The Republic filed an ex parte omnibus motion
to (a) reinstate the case and (b) resolve its pending motion for
leave of court to serve summons by publication.
In an order dated May 31, 2004, the trial court ordered the
reinstatement of the case and directed the Republic to cause the
service of the alias summons on Glasgow and CSBI within 15
days. However, it deferred its action on the Republics motion for
leave of court to serve summons by publication until a return was
made on the aliassummons.
Meanwhile, the Republic continued to exert efforts to obtain
information from other government agencies on the whereabouts
or current status of respondent Glasgow if only to save on
expenses of publication of summons. Its efforts, however, proved
futile. The records on file with the Securities and Exchange
Commission provided no information. Other inquiries yielded
negative results.
On July 12, 2004, the Republic received a copy of the sheriffs
return dated June 30, 2004 stating that the aliassummons had
been returned "unserved" as Glasgow was no longer holding office
at the given address since July 2002 and left no forwarding
address. Still, no action was taken by the trial court on the
Republics motion for leave of court to serve summons by
publication. Thus, on August 11, 2005, the Republic filed a
manifestation and ex parte motion to resolve its motion for leave of
court to serve summons by publication.
It was at that point that Glasgow filed a motion to dismiss by way of
special appearance which the Republic vigorously opposed.
Strangely, to say the least, the trial court issued the assailed order
granting Glasgows motion.
Given these circumstances, how could the Republic be faulted for
failure to prosecute the complaint for civil forfeiture? While there
was admittedly a delay in the proceeding, it could not be entirely or
primarily ascribed to the Republic. That Glasgows whereabouts
could not be ascertained was not only beyond the Republics
control, it was also attributable to Glasgow which left its principal
office address without informing the Securities and Exchange
Commission or any official regulatory body (like the Bureau of
Internal Revenue or the Department of Trade and Industry) of its
new address. Moreover, as early as October 8, 2003, the Republic
was already seeking leave of court to serve summons by
publication.
In Marahay v. Melicor,18 this Court ruled:
While a court can dismiss a case on the ground of non
prosequitur, the real test for the exercise of such power is
whether, under the circumstances, plaintiff is chargeable
with want of due diligence in failing to proceed with
reasonable promptitude. In the absence of a pattern or
scheme to delay the disposition of the case or a wanton
failure to observe the mandatory requirement of the
rules on the part of the plaintiff, as in the case at bar,
courts should decide to dispense with rather than wield
their authority to dismiss. (emphasis supplied)
We see no pattern or scheme on the part of the Republic to delay
the disposition of the case or a wanton failure to observe the
mandatory requirement of the rules. The trial court should not have
so eagerly wielded its power to dismiss the Republics complaint.
Service Of Summons
May Be By Publication
In Republic v. Sandiganbayan,19 this Court declared that the rule is
settled that forfeiture proceedings are actionsin rem. While that
case involved forfeiture proceedings under RA 1379, the same
principle applies in cases for civil forfeiture under RA 9160, as
amended, since both cases do not terminate in the imposition of a
penalty but merely in the forfeiture of the properties either acquired
illegally or related to unlawful activities in favor of the State.
As an action in rem, it is a proceeding against the thing itself
instead of against the person.20 In actions in rem orquasi in rem,
jurisdiction over the person of the defendant is not a prerequisite to
conferring jurisdiction on the court, provided that the court acquires
jurisdiction over the res.21 Nonetheless, summons must be served
upon the defendant in order to satisfy the requirements of due
process.22 For this purpose, service may be made by publication
as such mode of service is allowed in actions in rem and quasi in
rem.23
In this connection, Section 8, Title II of the Rule of Procedure in
Cases of Civil Forfeiture provides:
Sec. 8. Notice and manner of service. - (a) The respondent shall
be given notice of the petition in the same manner as service of
summons under Rule 14 of the Rules of Court and the following
rules:
the petition in a newspaper of general circulation
in such places and for such time as the court
may order. In the event that the cost of publication
exceeds the value or amount of the property to be
forfeited by ten percent, publication shall not be
required. (emphasis supplied)
WHEREFORE, the petition is hereby GRANTED. The October 27,
2005 order of the Regional Trial Court of Manila, Branch 47, in Civil
Case No. 03-107319 is SET ASIDE. The August 11, 2005 motion
to dismiss of Glasgow Credit and Collection Services, Inc.
is DENIED. And the complaint for forfeiture of the Republic of the
Philippines, represented by the Anti-Money Laundering Council,
is REINSTATED.
The case is hereby REMANDED to the Regional Trial Court of
Manila, Branch 47 which shall forthwith proceed with the case
pursuant to the provisions of A.M. No. 05-11-04-SC. Pending final
determination of the case, the November 23, 2005 temporary
restraining order issued by this Court is hereby MAINTAINED.

1. The notice shall be served on respondent personally, or SO ORDERED.

by any other means prescribed in Rule 14 of the Rules of
Court;

2. The notice shall contain: (i) the title of the case; (ii) the
docket number; (iii) the cause of action; and (iv) the relief
prayed for; and

3. The notice shall likewise contain a proviso that, if no

comment or opposition is filed within the reglementary
period, the court shall hear the case ex parte and render
such judgment as may be warranted by the facts alleged in
the petition and its supporting evidence.

(b) Where the respondent is designated as an

unknown owner or whenever his whereabouts are
unknown and cannot be ascertained by diligent
inquiry, service may, by leave of court, be
effected upon him by publication of the notice of
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 174629 February 14, 2008
REPUBLIC OF THE PHILIPPINES, Represented by THE ANTI-
MONEY LAUNDERING COUNCIL (AMLC),petitioner,
vs.
HON. ANTONIO M. EUGENIO, JR., AS PRESIDING JUDGE OF
RTC, MANILA, BRANCH 34, PANTALEON ALVAREZ and LILIA
CHENG, respondents.
DECISION
TINGA, J.:
The present petition for certiorari and prohibition under Rule 65
assails the orders and resolutions issued by two different courts in
two different cases. The courts and cases in question are the
Regional Trial Court of Manila, Branch 24, which heard SP Case
No. 06-1142001 and the Court of Appeals, Tenth Division, which
heared CA-G.R. SP No. 95198.2 Both cases arose as part of the
aftermath of the ruling of this Court in Agan v. PIATCO3nullifying
the concession agreement awarded to the Philippine International
Airport Terminal Corporation (PIATCO) over the Ninoy Aquino
International Airport International Passenger Terminal 3 (NAIA 3)
Project.
I.
Following the promulgation of Agan, a series of investigations
concerning the award of the NAIA 3 contracts to PIATCO were
undertaken by the Ombudsman and the Compliance and
Investigation Staff (CIS) of petitioner Anti-Money Laundering
Council (AMLC). On 24 May 2005, the Office of the Solicitor
General (OSG) wrote the AMLC requesting the latters assistance
"in obtaining more evidence to completely reveal the financial trail
of corruption surrounding the [NAIA 3] Project," and also noting
that petitioner Republic of the Philippines was presently defending
itself in two international arbitration cases filed in relation to the
NAIA 3 Project.4 The CIS conducted an intelligence database
search on the financial transactions of certain individuals involved
in the award, including respondent Pantaleon Alvarez (Alvarez)
who had been the Chairman of the PBAC Technical Committee,
NAIA-IPT3 Project.5 By this time, Alvarez had already been
charged by the Ombudsman with violation of Section 3(j) of R.A.
No. 3019.6 The search revealed that Alvarez maintained eight (8)
bank accounts with six (6) different banks.7
On 27 June 2005, the AMLC issued Resolution No. 75, Series of
2005,8 whereby the Council resolved to authorize the Executive
Director of the AMLC "to sign and verify an application to inquire
into and/or examine the [deposits] or investments of Pantaleon
Alvarez, Wilfredo Trinidad, Alfredo Liongson, and Cheng Yong,
and their related web of accounts wherever these may be found,
as defined under Rule 10.4 of the Revised Implementing Rules
and Regulations;" and to authorize the AMLC Secretariat "to
conduct an inquiry into subject accounts once the Regional Trial
Court grants the application to inquire into and/or examine the
bank accounts" of those four individuals.9 The resolution
enumerated the particular bank accounts of Alvarez, Wilfredo
Trinidad (Trinidad), Alfredo Liongson (Liongson) and Cheng Yong
which were to be the subject of the inquiry.10 The rationale for the
said resolution was founded on the cited findings of the CIS that
amounts were transferred from a Hong Kong bank account owned
by Jetstream Pacific Ltd. Account to bank accounts in the
Philippines maintained by Liongson and Cheng Yong.11 The
Resolution also noted that "[b]y awarding the contract to PIATCO
despite its lack of financial capacity, Pantaleon Alvarez caused
undue injury to the government by giving PIATCO unwarranted
benefits, advantage, or preference in the discharge of his official
administrative functions through manifest partiality, evident bad
faith, or gross inexcusable negligence, in violation of Section 3(e)
of Republic Act No. 3019."12
Under the authority granted by the Resolution, the AMLC filed an
application to inquire into or examine the deposits or investments
of Alvarez, Trinidad, Liongson and Cheng Yong before the RTC of
Makati, Branch 138, presided by Judge (now Court of Appeals
Justice) Sixto Marella, Jr. The application was docketed as AMLC
No. 05-005.13 The Makati RTC heard the testimony of the Deputy
Director of the AMLC, Richard David C. Funk II, and received the
documentary evidence of the AMLC.14 Thereafter, on 4 July 2005,
the Makati RTC rendered an Order (Makati RTC bank inquiry
order) granting the AMLC the authority to inquire and examine the
subject bank accounts of Alvarez, Trinidad, Liongson and Cheng
Yong, the trial court being satisfied that there existed "[p]robable
cause [to] believe that the deposits in various bank accounts,
details of which appear in paragraph 1 of the Application, are
related to the offense of violation of Anti-Graft and Corrupt
Practices Act now the subject of criminal prosecution before the
Sandiganbayan as attested to by the Informations, Exhibits C, D,
E, F, and G."15Pursuant to the Makati RTC bank inquiry order, the
CIS proceeded to inquire and examine the deposits, investments
and related web accounts of the four.16
Meanwhile, the Special Prosecutor of the Office of the
Ombudsman, Dennis Villa-Ignacio, wrote a letter dated 2
November 2005, requesting the AMLC to investigate the accounts
of Alvarez, PIATCO, and several other entities involved in the
nullified contract. The letter adverted to probable cause to believe
that the bank accounts "were used in the commission of unlawful
activities that were committed" in relation to the criminal cases then
pending before the Sandiganbayan.17 Attached to the letter was a
memorandum "on why the investigation of the [accounts] is
necessary in the prosecution of the above criminal cases before
the Sandiganbayan."18
In response to the letter of the Special Prosecutor, the AMLC
promulgated on 9 December 2005 Resolution No. 121 Series of
2005,19 which authorized the executive director of the AMLC to
inquire into and examine the accounts named in the letter,
including one maintained by Alvarez with DBS Bank and two other
accounts in the name of Cheng Yong with Metrobank. The
Resolution characterized the memorandum attached to the Special
Prosecutors letter as "extensively justif[ying] the existence of
probable cause that the bank accounts of the persons and entities
mentioned in the letter are related to the unlawful activity of
violation of Sections 3(g) and 3(e) of Rep. Act No. 3019, as
amended."20
Following the December 2005 AMLC Resolution, the Republic,
through the AMLC, filed an application21 before the Manila RTC to
inquire into and/or examine thirteen (13) accounts and two (2)
related web of accounts alleged as having been used to facilitate
corruption in the NAIA 3 Project. Among said accounts were the
DBS Bank account of Alvarez and the Metrobank accounts of
Cheng Yong. The case was raffled to Manila RTC, Branch 24,
presided by respondent Judge Antonio Eugenio, Jr., and docketed
as SP Case No. 06-114200.
On 12 January 2006, the Manila RTC issued an Order (Manila
RTC bank inquiry order) granting the Ex ParteApplication
expressing therein "[that] the allegations in said application to be
impressed with merit, and in conformity with Section 11 of R.A. No.
9160, as amended, otherwise known as the Anti-Money
Laundering Act (AMLA) of 2001 and Rules 11.1 and 11.2 of the
Revised Implementing Rules and Regulations."22 Authority was
thus granted to the AMLC to inquire into the bank accounts listed
therein.
On 25 January 2006, Alvarez, through counsel, entered his
appearance23 before the Manila RTC in SP Case No. 06-114200
and filed an Urgent Motion to Stay Enforcement of Order of
January 12, 2006.24 Alvarez alleged that he fortuitously learned of
the bank inquiry order, which was issued following an ex
parte application, and he argued that nothing in R.A. No. 9160
authorized the AMLC to seek the authority to inquire into bank
accounts ex parte.25 The day after Alvarez filed his motion, 26
January 2006, the Manila RTC issued an Order26 staying the
enforcement of its bank inquiry order and giving the Republic five
(5) days to respond to Alvarezs motion.
The Republic filed an Omnibus Motion for Reconsideration27 of the
26 January 2006 Manila RTC Order and likewise sought to strike
out Alvarezs motion that led to the issuance of said order. For his
part, Alvarez filed a Reply and Motion to Dismiss28 the application
for bank inquiry order. On 2 May 2006, the Manila RTC issued an
Omnibus Order29 granting the Republics Motion for
Reconsideration, denying Alvarezs motion to dismiss and
reinstating "in full force and effect" the Order dated 12 January
2006. In the omnibus order, the Manila RTC reiterated that the
material allegations in the application for bank inquiry order filed by
the Republic stood as "the probable cause for the investigation and
examination of the bank accounts and investments of the
respondents."30
Alvarez filed on 10 May 2006 an Urgent Motion31 expressing his
apprehension that the AMLC would immediately enforce the
omnibus order and would thereby render the motion for
reconsideration he intended to file as moot and academic; thus he
sought that the Republic be refrained from enforcing the omnibus
order in the meantime. Acting on this motion, the Manila RTC, on
11 May 2006, issued an Order32 requiring the OSG to file a
comment/opposition and reminding the parties that judgments and
orders become final and executory upon the expiration of fifteen
(15) days from receipt thereof, as it is the period within which a
motion for reconsideration could be filed. Alvarez filed his Motion
for Reconsideration33 of the omnibus order on 15 May 2006, but
the motion was denied by the Manila RTC in an Order34 dated 5
July 2006.
On 11 July 2006, Alvarez filed an Urgent Motion and
Manifestation35 wherein he manifested having received reliable
information that the AMLC was about to implement the Manila RTC
bank inquiry order even though he was intending to appeal from it.
On the premise that only a final and executory judgment or order
could be executed or implemented, Alvarez sought that the AMLC
be immediately ordered to refrain from enforcing the Manila RTC
bank inquiry order.
On 12 July 2006, the Manila RTC, acting on Alvarezs latest
motion, issued an Order36 directing the AMLC "to refrain from
enforcing the order dated January 12, 2006 until the expiration of
the period to appeal, without any appeal having been filed." On the
same day, Alvarez filed a Notice of Appeal37 with the Manila RTC.
On 24 July 2006, Alvarez filed an Urgent Ex Parte Motion for
Clarification.38 Therein, he alleged having learned that the AMLC
had began to inquire into the bank accounts of the other persons
mentioned in the application for bank inquiry order filed by the
Republic.39 Considering that the Manila RTC bank inquiry order
was issued ex parte, without notice to those other persons, Alvarez
prayed that the AMLC be ordered to refrain from inquiring into any
of the other bank deposits and alleged web of accounts
enumerated in AMLCs application with the RTC; and that the
AMLC be directed to refrain from using, disclosing or publishing in
any proceeding or venue any information or document obtained in
violation of the 11 May 2006 RTC Order.40
On 25 July 2006, or one day after Alvarez filed his motion, the
Manila RTC issued an Order41 wherein it clarified that "the Ex
Parte Order of this Court dated January 12, 2006 can not be
implemented against the deposits or accounts of any of the
persons enumerated in the AMLC Application until the appeal of
movant Alvarez is finally resolved, otherwise, the appeal would be
rendered moot and academic or even nugatory."42 In addition, the
AMLC was ordered "not to disclose or publish any information or
document found or obtained in [v]iolation of the May 11, 2006
Order of this Court."43 The Manila RTC reasoned that the other
persons mentioned in AMLCs application were not served with the
courts 12 January 2006 Order. This 25 July 2006 Manila RTC
Order is the first of the four rulings being assailed through this
petition.
In response, the Republic filed an Urgent Omnibus Motion for
Reconsideration44 dated 27 July 2006, urging that it be allowed to
immediately enforce the bank inquiry order against Alvarez and
that Alvarezs notice of appeal be expunged from the records since
appeal from an order of inquiry is disallowed under the Anti money
Laundering Act (AMLA).
Meanwhile, respondent Lilia Cheng filed with the Court of Appeals
a Petition for Certiorari, Prohibition and Mandamus with Application
for TRO and/or Writ of Preliminary Injunction45 dated 10 July 2006,
directed against the Republic of the Philippines through the AMLC,
Manila RTC Judge Eugenio, Jr. and Makati RTC Judge Marella,
Jr.. She identified herself as the wife of Cheng Yong46 with whom
she jointly owns a conjugal bank account with Citibank that is
covered by the Makati RTC bank inquiry order, and two conjugal
bank accounts with Metrobank that are covered by the Manila RTC
bank inquiry order. Lilia Cheng imputed grave abuse of discretion
on the part of the Makati and Manila RTCs in granting AMLCs ex
parte applications for a bank inquiry order, arguing among others
that the ex parte applications violated her constitutional right to due
process, that the bank inquiry order under the AMLA can only be
granted in connection with violations of the AMLA and that the
AMLA can not apply to bank accounts opened and transactions
entered into prior to the effectivity of the AMLA or to bank accounts
located outside the Philippines.47
On 1 August 2006, the Court of Appeals, acting on Lilia Chengs
petition, issued a Temporary Restraining Order48enjoining the
Manila and Makati trial courts from implementing, enforcing or
executing the respective bank inquiry orders previously issued, and
the AMLC from enforcing and implementing such orders. On even
date, the Manila RTC issued an Order49 resolving to hold in
abeyance the resolution of the urgent omnibus motion for
reconsideration then pending before it until the resolution of Lilia
Chengs petition for certiorari with the Court of Appeals. The Court
of Appeals Resolution directing the issuance of the temporary
restraining order is the second of the four rulings assailed in the
present petition.
The third assailed ruling50 was issued on 15 August 2006 by the
Manila RTC, acting on the Urgent Motion for Clarification51 dated
14 August 2006 filed by Alvarez. It appears that the 1 August 2006
Manila RTC Order had amended its previous 25 July 2006 Order
by deleting the last paragraph which stated that the AMLC "should
not disclose or publish any information or document found or
obtained in violation of the May 11, 2006 Order of this Court."52 In
this new motion, Alvarez argued that the deletion of that paragraph
would allow the AMLC to implement the bank inquiry orders and
publish whatever information it might obtain thereupon even before
the final orders of the Manila RTC could become final and
executory.53 In the 15 August 2006 Order, the Manila RTC
reiterated that the bank inquiry order it had issued could not be
implemented or enforced by the AMLC or any of its representatives
until the appeal therefrom was finally resolved and that any
enforcement thereof would be unauthorized.54
The present Consolidated Petition55 for certiorari and prohibition
under Rule 65 was filed on 2 October 2006, assailing the two
Orders of the Manila RTC dated 25 July and 15 August 2006 and
the Temporary Restraining Order dated 1 August 2006 of the Court
of Appeals. Through an Urgent Manifestation and Motion56 dated 9
October 2006, petitioner informed the Court that on 22 September
2006, the Court of Appeals hearing Lilia Chengs petition had
granted a writ of preliminary injunction in her favor.57 Thereafter,
petitioner sought as well the nullification of the 22 September 2006
Resolution of the Court of Appeals, thereby constituting the fourth
ruling assailed in the instant petition.58
The Court had initially granted a Temporary Restraining
Order59 dated 6 October 2006 and later on a Supplemental
Temporary Restraining Order60 dated 13 October 2006 in
petitioners favor, enjoining the implementation of the assailed
rulings of the Manila RTC and the Court of Appeals. However, on
respondents motion, the Court, through a Resolution61 dated 11
December 2006, suspended the implementation of the restraining
orders it had earlier issued.
Oral arguments were held on 17 January 2007. The Court
consolidated the issues for argument as follows:
1. Did the RTC-Manila, in issuing the Orders dated 25 July
2006 and 15 August 2006 which deferred the
implementation of its Order dated 12 January 2006, and the
Court of Appeals, in issuing its Resolution dated 1 August
2006, which ordered the status quo in relation to the 1 July
2005 Order of the RTC-Makati and the 12 January 2006
Order of the RTC-Manila, both of which authorized the
examination of bank accounts under Section 11 of Rep. Act
No. 9160 (AMLA), commit grave abuse of discretion?
(a) Is an application for an order authorizing inquiry
into or examination of bank accounts or investments
 under Section 11 of the AMLA ex-parte in nature or
one which requires notice and hearing?
(b) What legal procedures and standards should be
observed in the conduct of the proceedings for the
issuance of said order?
(c) Is such order susceptible to legal challenges and
judicial review?
2. Is it proper for this Court at this time and in this case to
inquire into and pass upon the validity of the 1 July 2005
Order of the RTC-Makati and the 12 January 2006 Order of
the RTC-Manila, considering the pendency of CA G.R. SP
No. 95-198 (Lilia Cheng v. Republic) wherein the validity of
both orders was challenged?62
After the oral arguments, the parties were directed to file their
respective memoranda, which they did,63 and the petition was
thereafter deemed submitted for resolution.
II.
Petitioners general advocacy is that the bank inquiry orders issued
by the Manila and Makati RTCs are valid and immediately
enforceable whereas the assailed rulings, which effectively stayed
the enforcement of the Manila and Makati RTCs bank inquiry
orders, are sullied with grave abuse of discretion. These
conclusions flow from the posture that a bank inquiry order, issued
upon a finding of probable cause, may be issued ex parte and,
once issued, is immediately executory. Petitioner further argues
that the information obtained following the bank inquiry is
necessarily beneficial, if not indispensable, to the AMLC in
discharging its awesome responsibility regarding the effective
implementation of the AMLA and that any restraint in the disclosure
of such information to appropriate agencies or other judicial fora
would render meaningless the relief supplied by the bank inquiry
order.
Petitioner raises particular arguments questioning Lilia Chengs
right to seek injunctive relief before the Court of Appeals, noting
that not one of the bank inquiry orders is directed against her. Her
"cryptic assertion" that she is the wife of Cheng Yong cannot,
according to petitioner, "metamorphose into the requisite legal
standing to seek redress for an imagined injury or to maintain an
action in behalf of another." In the same breath, petitioner argues
that Alvarez cannot assert any violation of the right to financial
privacy in behalf of other persons whose bank accounts are being
inquired into, particularly those other persons named in the Makati
RTC bank inquiry order who did not take any step to oppose such
orders before the courts.
Ostensibly, the proximate question before the Court is whether a
bank inquiry order issued in accordance with Section 10 of the
AMLA may be stayed by injunction. Yet in arguing that it does,
petitioner relies on what it posits as the final and immediately
executory character of the bank inquiry orders issued by the Manila
and Makati RTCs. Implicit in that position is the notion that the
inquiry orders are valid, and such notion is susceptible to review
and validation based on what appears on the face of the orders
and the applications which triggered their issuance, as well as the
provisions of the AMLA governing the issuance of such orders.
Indeed, to test the viability of petitioners argument, the Court will
have to be satisfied that the subject inquiry orders are valid in the
first place. However, even from a cursory examination of the
applications for inquiry order and the orders themselves, it is
evident that the orders are not in accordance with law.
III.
A brief overview of the AMLA is called for.
Money laundering has been generally defined by the International
Criminal Police Organization (Interpol) `as "any act or attempted
act to conceal or disguise the identity of illegally obtained proceeds
so that they appear to have originated from legitimate
sources."64 Even before the passage of the AMLA, the problem
was addressed by the Philippine government through the issuance
of various circulars by the Bangko Sentral ng Pilipinas. Yet
ultimately, legislative proscription was necessary, especially with
the inclusion of the Philippines in the Financial Action Task Forces
list of non-cooperative countries and territories in the fight against
money laundering.65 The original AMLA, Republic Act (R.A.) No.
9160, was passed in 2001. It was amended by R.A. No. 9194 in
2003.
Section 4 of the AMLA states that "[m]oney laundering is a crime
whereby the proceeds of an unlawful activity as [defined in the law]
are transacted, thereby making them appear to have originated
from legitimate sources."66The section further provides the three
modes through which the crime of money laundering is committed.
Section 7 creates the AMLC and defines its powers, which
generally relate to the enforcement of the AMLA provisions and the
initiation of legal actions authorized in the AMLA such as civil
forefeiture proceedings and complaints for the prosecution of
money laundering offenses.67
In addition to providing for the definition and penalties for the crime
of money laundering, the AMLA also authorizes certain provisional
remedies that would aid the AMLC in the enforcement of the
AMLA. These are the "freeze order" authorized under Section 10,
and the "bank inquiry order" authorized under Section 11.
Respondents posit that a bank inquiry order under Section 11 may
be obtained only upon the pre-existence of a money laundering
offense case already filed before the courts.68 The conclusion is
based on the phrase "upon order of any competent court in cases
of violation of this Act," the word "cases" generally understood as
referring to actual cases pending with the courts.
We are unconvinced by this proposition, and agree instead with
the then Solicitor General who conceded that the use of the phrase
"in cases of" was unfortunate, yet submitted that it should be
interpreted to mean "in the event there are violations" of the AMLA,
and not that there are already cases pending in court concerning
such violations.69 If the contrary position is adopted, then the bank
inquiry order would be limited in purpose as a tool in aid of
litigation of live cases, and wholly inutile as a means for the
government to ascertain whether there is sufficient evidence to
sustain an intended prosecution of the account holder for violation
of the AMLA. Should that be the situation, in all likelihood the
AMLC would be virtually deprived of its character as a discovery
tool, and thus would become less circumspect in filing complaints
against suspect account holders. After all, under such set-up the
preferred strategy would be to allow or even encourage the
indiscriminate filing of complaints under the AMLA with the hope or
expectation that the evidence of money laundering would
somehow surface during the trial. Since the AMLC could not make
use of the bank inquiry order to determine whether there is
evidentiary basis to prosecute the suspected malefactors, not filing
any case at all would not be an alternative. Such unwholesome
set-up should not come to pass. Thus Section 11 cannot be
interpreted in a way that would emasculate the remedy it has
established and encourage the unfounded initiation of complaints
for money laundering.
Still, even if the bank inquiry order may be availed of without need
of a pre-existing case under the AMLA, it does not follow that such
order may be availed of ex parte. There are several reasons why
the AMLA does not generally sanction ex parte applications and
issuances of the bank inquiry order.
IV.
It is evident that Section 11 does not specifically authorize, as a
general rule, the issuance ex parte of the bank inquiry order. We
quote the provision in full:
SEC. 11. Authority to Inquire into Bank Deposits.
Notwithstanding the provisions of Republic Act No. 1405, as
amended, Republic Act No. 6426, as amended, Republic Act No.
8791, and other laws, the AMLC may inquire into or examine any
particular deposit or investment with any banking institution or
non bank financial institution upon order of any competent court
in cases of violation of this Act, when it has been established
that there is probable cause that the deposits or investments
are related to an unlawful activity as defined in Section 3(i)
hereof or a money laundering offense under Section 4 hereof,
 except that no court order shall be required in cases involving
unlawful activities defined in Sections 3(i)1, (2) and (12).
To ensure compliance with this Act, the Bangko Sentral ng
Pilipinas (BSP) may inquire into or examine any deposit of
investment with any banking institution or non bank financial
institution when the examination is made in the course of a
periodic or special examination, in accordance with the
rules of examination of the BSP.70 (Emphasis supplied)
Of course, Section 11 also allows the AMLC to inquire into bank
accounts without having to obtain a judicial order in cases where
there is probable cause that the deposits or investments are
related to kidnapping for ransom,71certain violations of the
Comprehensive Dangerous Drugs Act of 2002,72 hijacking and
other violations under R.A. No. 6235, destructive arson and
murder. Since such special circumstances do not apply in this
case, there is no need for us to pass comment on this proviso.
Suffice it to say, the proviso contemplates a situation distinct from
that which presently confronts us, and for purposes of the
succeeding discussion, our reference to Section 11 of the AMLA
excludes said proviso.
In the instances where a court order is required for the issuance of
the bank inquiry order, nothing in Section 11 specifically authorizes
that such court order may be issued ex parte. It might be argued
that this silence does not preclude the ex parte issuance of the
bank inquiry order since the same is not prohibited under Section
11. Yet this argument falls when the immediately preceding
provision, Section 10, is examined.
SEC. 10. Freezing of Monetary Instrument or
Property. 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 unlawful activity as defined in Section 3(i)
hereof, may issue a freeze order which shall be effective
immediately. The freeze order shall be for a period of twenty (20)
days unless extended by the court.73
Although oriented towards different purposes, the freeze order
under Section 10 and the bank inquiry order under Section 11 are
similar in that they are extraordinary provisional reliefs which the
AMLC may avail of to effectively combat and prosecute money
laundering offenses. Crucially, Section 10 uses specific language
to authorize an ex parte application for the provisional relief
therein, a circumstance absent in Section 11. If indeed the
legislature had intended to authorize ex parte proceedings for the
issuance of the bank inquiry order, then it could have easily
expressed such intent in the law, as it did with the freeze order
under Section 10.
Even more tellingly, the current language of Sections 10 and 11 of
the AMLA was crafted at the same time, through the passage of
R.A. No. 9194. Prior to the amendatory law, it was the AMLC, not
the Court of Appeals, which had authority to issue a freeze order,
whereas a bank inquiry order always then required, without
exception, an order from a competent court.74 It was through the
same enactment that ex parte proceedings were introduced for the
first time into the AMLA, in the case of the freeze order which now
can only be issued by the Court of Appeals. It certainly would have
been convenient, through the same amendatory law, to allow a
similar ex parteprocedure in the case of a bank inquiry order had
Congress been so minded. Yet nothing in the provision itself, or
even the available legislative record, explicitly points to an ex
parte judicial procedure in the application for a bank inquiry order,
unlike in the case of the freeze order.
That the AMLA does not contemplate ex parte proceedings in
applications for bank inquiry orders is confirmed by the present
implementing rules and regulations of the AMLA, promulgated
upon the passage of R.A. No. 9194. With respect to freeze orders
under Section 10, the implementing rules do expressly provide that
the applications for freeze orders be filed ex parte,75 but no similar
clearance is granted in the case of inquiry orders under Section
11.76 These implementing rules were promulgated by the Bangko
Sentral ng Pilipinas, the Insurance Commission and the Securities
and Exchange Commission,77 and if it was the true belief of these
institutions that inquiry orders could be issued ex parte similar to
freeze orders, language to that effect would have been
incorporated in the said Rules. This is stressed not because the
implementing rules could authorize ex parteapplications for inquiry
orders despite the absence of statutory basis, but rather because
the framers of the law had no intention to allow such ex
parte applications.
Even the Rules of Procedure adopted by this Court in A.M. No. 05-
11-04-SC78 to enforce the provisions of the AMLA specifically
authorize ex parte applications with respect to freeze orders under
Section 1079 but make no similar authorization with respect to bank
inquiry orders under Section 11.
The Court could divine the sense in allowing ex parte proceedings
under Section 10 and in proscribing the same under Section 11. A
freeze order under Section 10 on the one hand is aimed at
preserving monetary instruments or property in any way deemed
related to unlawful activities as defined in Section 3(i) of the AMLA.
The owner of such monetary instruments or property would thus be
inhibited from utilizing the same for the duration of the freeze order.
To make such freeze order anteceded by a judicial proceeding with
notice to the account holder would allow for or lead to the
dissipation of such funds even before the order could be issued.
On the other hand, a bank inquiry order under Section 11 does not
necessitate any form of physical seizure of property of the account
holder. What the bank inquiry order authorizes is the examination
of the particular deposits or investments in banking institutions or
non-bank financial institutions. The monetary instruments or
property deposited with such banks or financial institutions are not
seized in a physical sense, but are examined on particular details
such as the account holders record of deposits and transactions.
Unlike the assets subject of the freeze order, the records to be
inspected under a bank inquiry order cannot be physically seized
or hidden by the account holder. Said records are in the
possession of the bank and therefore cannot be destroyed at the
instance of the account holder alone as that would require the
extraordinary cooperation and devotion of the bank.
Interestingly, petitioners memorandum does not attempt to
demonstrate before the Court that the bank inquiry order under
Section 11 may be issued ex parte, although the petition itself did
devote some space for that argument. The petition argues that the
bank inquiry order is "a special and peculiar remedy, drastic in its
name, and made necessary because of a public necessity [t]hus,
by its very nature, the application for an order or inquiry must
necessarily, be ex parte." This argument is insufficient justification
in light of the clear disinclination of Congress to allow the
issuance ex parte of bank inquiry orders under Section 11, in
contrast to the legislatures clear inclination to allow the ex
parte grant of freeze orders under Section 10.
Without doubt, a requirement that the application for a bank inquiry
order be done with notice to the account holder will alert the latter
that there is a plan to inspect his bank account on the belief that
the funds therein are involved in an unlawful activity or money
laundering offense.80 Still, the account holder so alerted will in fact
be unable to do anything to conceal or cleanse his bank account
records of suspicious or anomalous transactions, at least not
without the whole-hearted cooperation of the bank, which
inherently has no vested interest to aid the account holder in such
manner.
V.
The necessary implication of this finding that Section 11 of the
AMLA does not generally authorize the issuance ex parte of the
bank inquiry order would be that such orders cannot be issued
unless notice is given to the owners of the account, allowing them
the opportunity to contest the issuance of the order. Without such a
consequence, the legislated distinction between ex
parte proceedings under Section 10 and those which are not ex
parte under Section 11 would be lost and rendered useless.
There certainly is fertile ground to contest the issuance of an ex
parte order. Section 11 itself requires that it be established that
"there is probable cause that the deposits or investments are
related to unlawful activities," and it obviously is the court which
stands as arbiter whether there is indeed such probable cause.
The process of inquiring into the existence of probable cause
would involve the function of determination reposed on the trial
court. Determination clearly implies a function of adjudication on
the part of the trial court, and not a mechanical application of a
standard pre-determination by some other body. The word
"determination" implies deliberation and is, in normal legal
contemplation, equivalent to "the decision of a court of justice."81
The court receiving the application for inquiry order cannot simply
take the AMLCs word that probable cause exists that the deposits
or investments are related to an unlawful activity. It will have to
exercise its
own determinative function in order to be convinced of such fact.
The account holder would be certainly capable of contesting such
probable cause if given the opportunity to be apprised of the
pending application to inquire into his account; hence a notice
requirement would not be an empty spectacle. It may be so that
the process of obtaining the inquiry order may become more
cumbersome or prolonged because of the notice requirement, yet
we fail to see any unreasonable burden cast by such circumstance.
After all, as earlier stated, requiring notice to the account holder
should not, in any way, compromise the integrity of the bank
records subject of the inquiry which remain in the possession and
control of the bank.
Petitioner argues that a bank inquiry order necessitates a finding of
probable cause, a characteristic similar to a search warrant which
is applied to and heard ex parte. We have examined the supposed
analogy between a search warrant and a bank inquiry order yet we
remain to be unconvinced by petitioner.
The Constitution and the Rules of Court prescribe particular
requirements attaching to search warrants that are not imposed by
the AMLA with respect to bank inquiry orders. A constitutional
warrant requires that the judge personally examine under oath or
affirmation the complainant and the witnesses he may
produce,82 such examination being in the form of searching
questions and answers.83 Those are impositions which the
legislative did not specifically prescribe as to the bank inquiry order
under the AMLA, and we cannot find sufficient legal basis to apply
them to Section 11 of the AMLA. Simply put, a bank inquiry order is
not a search warrant or warrant of arrest as it contemplates a direct
object but not the seizure of persons or property.
Even as the Constitution and the Rules of Court impose a high
procedural standard for the determination of probable cause for the
issuance of search warrants which Congress chose not to
prescribe for the bank inquiry order under the AMLA, Congress
nonetheless disallowed ex parte applications for the inquiry order.
We can discern that in exchange for these procedural standards
normally applied to search warrants, Congress chose instead to
legislate a right to notice and a right to be heard characteristics
of judicial proceedings which are notex parte. Absent any
demonstrable constitutional infirmity, there is no reason for us to
dispute such legislative policy choices.
VI.
The Courts construction of Section 11 of the AMLA is undoubtedly
influenced by right to privacy considerations. If sustained,
petitioners argument that a bank account may be inspected by the
government following an ex parteproceeding about which the
depositor would know nothing would have significant implications
on the right to privacy, a right innately cherished by all
notwithstanding the legally recognized exceptions thereto. The
notion that the government could be so empowered is cause for
concern of any individual who values the right to privacy which,
after all, embodies even the right to be "let
alone," the most comprehensive of rights and the right most valued
by civilized people.84
One might assume that the constitutional dimension of the right to
privacy, as applied to bank deposits, warrants our present inquiry.
We decline to do so. Admittedly, that question has proved
controversial in American jurisprudence. Notably, the United States
Supreme Court in U.S. v. Miller85 held that there was no legitimate
expectation of privacy as to the bank records of a
depositor.86 Moreover, the text of our Constitution has not bothered
with the triviality of allocating specific rights peculiar to bank
deposits.
However, sufficient for our purposes, we can assert there is a right
to privacy governing bank accounts in the Philippines, and that
such right finds application to the case at bar. The source of such
right is statutory, expressed as it is in R.A. No. 1405 otherwise
known as the Bank Secrecy Act of 1955. The right to privacy is
enshrined in Section 2 of that law, to wit:
SECTION 2. All deposits of whatever nature with banks
or banking institutions in the Philippines including
investments in bonds issued by the Government of the
Philippines, its political subdivisions and its
instrumentalities, are hereby considered as of an
absolutely confidential nature and may not be examined,
inquired or looked into by any person, government official,
bureau or office, except upon written permission of the
depositor, or in cases of impeachment, or upon order of a
competent court in cases of bribery or dereliction of duty of
public officials, or in cases where the money deposited or
invested is the subject matter of the litigation. (Emphasis
supplied)
Because of the Bank Secrecy Act, the confidentiality of bank
deposits remains a basic state policy in the
87
Philippines. Subsequent laws, including the AMLA, may have
added exceptions to the Bank Secrecy Act, yet the secrecy of bank
deposits still lies as the general rule. It falls within the zones of
privacy recognized by our laws.88The framers of the 1987
Constitution likewise recognized that bank accounts are not
covered by either the right to information89 under Section 7, Article
III or under the requirement of full public disclosure90 under Section
28, Article II.91 Unless the Bank Secrecy Act is repealed or
amended, the legal order is obliged to conserve the absolutely
confidential nature of Philippine bank deposits.
Any exception to the rule of absolute confidentiality must be
specifically legislated. Section 2 of the Bank Secrecy Act itself
prescribes exceptions whereby these bank accounts may be
examined by "any person, government official, bureau or office";
namely when: (1) upon written permission of the depositor; (2) in
cases of impeachment; (3) the examination of bank accounts is
upon order of a competent court in cases of bribery or dereliction of
duty of public officials; and (4) the money deposited or invested is
the subject matter of the litigation. Section 8 of R.A. Act No. 3019,
the Anti-Graft and Corrupt Practices Act, has been recognized by
this Court as constituting an additional exception to the rule of
absolute confidentiality,92 and there have been other similar
recognitions as well.93
The AMLA also provides exceptions to the Bank Secrecy Act.
Under Section 11, the AMLC may inquire into a bank account upon
order of any competent court in cases of violation of the AMLA, it
having been established that there is probable cause that the
deposits or investments are related to unlawful activities as defined
in Section 3(i) of the law, or a money laundering offense under
Section 4 thereof. Further, in instances where there is probable
cause that the deposits or investments are related to kidnapping
for ransom,94 certain violations of the Comprehensive Dangerous
Drugs Act of 2002,95 hijacking and other violations under R.A. No.
6235, destructive arson and murder, then there is no need for the
AMLC to obtain a court order before it could inquire into such
accounts.
It cannot be successfully argued the proceedings relating to the
bank inquiry order under Section 11 of the AMLA is a "litigation"
encompassed in one of the exceptions to the Bank Secrecy Act
which is when "the money deposited or invested is the subject
matter of the litigation." The orientation of the bank inquiry order is
simply to serve as a provisional relief or remedy. As earlier stated,
the application for such does not entail a full-blown trial.
Nevertheless, just because the AMLA establishes additional
exceptions to the Bank Secrecy Act it does not mean that the later
law has dispensed with the general principle established in the
older law that "[a]ll deposits of whatever nature with banks or
banking institutions in the Philippines x x x are hereby considered
as of an absolutely confidential nature."96 Indeed, by force of
statute, all bank deposits are absolutely confidential, and that
nature is unaltered even by the legislated exceptions referred to
above. There is disfavor towards construing these exceptions in
such a manner that would authorize unlimited discretion on the
part of the government or of any party seeking to enforce those
exceptions and inquire into bank deposits. If there are doubts in
upholding the absolutely confidential nature of bank deposits
against affirming the authority to inquire into such accounts, then
such doubts must be resolved in favor of the former. Such a stance
would persist unless Congress passes a law reversing the general
state policy of preserving the absolutely confidential nature of
Philippine bank accounts.
The presence of this statutory right to privacy addresses at least
one of the arguments raised by petitioner, that Lilia Cheng had no
personality to assail the inquiry orders before the Court of Appeals
because she was not the subject of said orders. AMLC Resolution
No. 75, which served as the basis in the successful application for
the Makati inquiry order, expressly adverts to Citibank Account No.
88576248 "owned by Cheng Yong and/or Lilia G. Cheng with
Citibank N.A.,"97 whereas Lilia Chengs petition before the Court of
Appeals is accompanied by a certification from Metrobank that
Account Nos. 300852436-0 and 700149801-7, both of which are
among the subjects of the Manila inquiry order, are accounts in the
name of "Yong Cheng or Lilia Cheng."98 Petitioner does not
specifically deny that Lilia Cheng holds rights of ownership over the
three said accounts, laying focus instead on the fact that she was
not named as a subject of either the Makati or Manila RTC inquiry
orders. We are reasonably convinced that Lilia Cheng has
sufficiently demonstrated her joint ownership of the three accounts,
and such conclusion leads us to acknowledge that she has the
standing to assail via certiorari the inquiry orders authorizing the
examination of her bank accounts as the orders interfere with her
statutory right to maintain the secrecy of said accounts.
While petitioner would premise that the inquiry into Lilia Chengs
accounts finds root in Section 11 of the AMLA, it cannot be denied
that the authority to inquire under Section 11 is only exceptional in
character, contrary as it is to the general rule preserving the
secrecy of bank deposits. Even though she may not have been the
subject of the inquiry orders, her bank accounts nevertheless were,
and she thus has the standing to vindicate the right to secrecy that
attaches to said accounts and their owners. This statutory right to
privacy will not prevent the courts from authorizing the inquiry
anyway upon the fulfillment of the requirements set forth under
Section 11 of the AMLA or Section 2 of the Bank Secrecy Act; at
the same time, the owner of the accounts have the right to
challenge whether the requirements were indeed complied with.
VII.
There is a final point of concern which needs to be addressed. Lilia
Cheng argues that the AMLA, being a substantive penal statute,
has no retroactive effect and the bank inquiry order could not apply
to deposits or investments opened prior to the effectivity of Rep.
Act No. 9164, or on 17 October 2001. Thus, she concludes, her
subject bank accounts, opened between 1989 to 1990, could not
be the subject of the bank inquiry order lest there be a violation of
the constitutional prohibition against ex post facto laws.
No ex post facto law may be enacted,99 and no law may be
construed in such fashion as to permit a criminal prosecution
offensive to the ex post facto clause. As applied to the AMLA, it is
plain that no person may be prosecuted under the penal provisions
of the AMLA for acts committed prior to the enactment of the law
on 17 October 2001. As much was understood by the lawmakers
since they deliberated upon the AMLA, and indeed there is no
serious dispute on that point.
Does the proscription against ex post facto laws apply to the
interpretation of Section 11, a provision which does not provide for
a penal sanction but which merely authorizes the inspection of
suspect accounts and deposits? The answer is in the affirmative. In
this jurisdiction, we have defined an ex post facto law as one which
either:
(1) makes criminal an act done before the passage of the
law and which was innocent when done, and punishes such
an act;
(2) aggravates a crime, or makes it greater than it was,
when committed;
 (3) changes the punishment and inflicts a greater
punishment than the law annexed to the crime when
committed;
(4) alters the legal rules of evidence, and authorizes
conviction upon less or different testimony than the law
required at the time of the commission of the offense;
(5) assuming to regulate civil rights and remedies only, in
effect imposes penalty or deprivation of a right for
something which when done was lawful; and
(6) deprives a person accused of a crime of some lawful
protection to which he has become entitled, such as
the protection of a former conviction or acquittal, or a
proclamation of amnesty.(Emphasis supplied)100
Prior to the enactment of the AMLA, the fact that bank accounts or
deposits were involved in activities later on enumerated in Section
3 of the law did not, by itself, remove such accounts from the
shelter of absolute confidentiality. Prior to the AMLA, in order that
bank accounts could be examined, there was need to secure either
the written permission of the depositor or a court order authorizing
such examination, assuming that they were involved in cases of
bribery or dereliction of duty of public officials, or in a case where
the money deposited or invested was itself the subject matter of
the litigation. The passage of the AMLA stripped another layer off
the rule on absolute confidentiality that provided a measure of
lawful protection to the account holder. For that reason, the
application of the bank inquiry order as a means of inquiring into
records of transactions entered into prior to the passage of the
AMLA would be constitutionally infirm, offensive as it is to the ex
post facto clause.
Still, we must note that the position submitted by Lilia Cheng is
much broader than what we are willing to affirm. She argues that
the proscription against ex post facto laws goes as far as to
prohibit any inquiry into deposits or investments included in bank
accounts opened prior to the effectivity of the AMLA even if the
suspect transactions were entered into when the law had already
taken effect. The Court recognizes that if this argument were to be
affirmed, it would create a horrible loophole in the AMLA that would
in turn supply the means to fearlessly engage in money laundering
in the Philippines; all that the criminal has to do is to make sure
that the money laundering activity is facilitated through a bank
account opened prior to 2001. Lilia Cheng admits that "actual
money launderers could utilize the ex post facto provision of the
Constitution as a shield" but that the remedy lay with Congress to
amend the law. We can hardly presume that Congress intended to
enact a self-defeating law in the first place, and the courts are
inhibited from such a construction by the cardinal rule that "a law
should be interpreted with a view to upholding rather than
destroying it."101
Besides, nowhere in the legislative record cited by Lilia Cheng
does it appear that there was an unequivocal intent to exempt from
the bank inquiry order all bank accounts opened prior to the
passage of the AMLA. There is a cited exchange between
Representatives Ronaldo Zamora and Jaime Lopez where the
latter confirmed to the former that "deposits are supposed to be
exempted from scrutiny or monitoring if they are already in place
as of the time the law is enacted."102 That statement does indicate
that transactions already in place when the AMLA was passed are
indeed exempt from scrutiny through a bank inquiry order, but it
cannot yield any interpretation that records of transactions
undertaken after the enactment of the AMLA are similarly exempt.
Due to the absence of cited authority from the legislative record
that unqualifiedly supports respondent Lilia Chengs thesis, there is
no cause for us to sustain her interpretation of the AMLA, fatal as it
is to the anima of that law.
IX.
We are well aware that Lilia Chengs petition presently pending
before the Court of Appeals likewise assails the validity of the
subject bank inquiry orders and precisely seeks the annulment of
said orders. Our current declarations may indeed have the effect of
preempting that0 petition. Still, in order for this Court to rule on the
petition at bar which insists on the enforceability of the said bank
inquiry orders, it is necessary for us to consider and rule on the
same question which after all is a pure question of law.

WHEREFORE, the PETITION is DISMISSED. No pronouncement

as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. Nos. 164368-69 April 2, 2009

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
JOSEPH EJERCITO ESTRADA and THE HONORABLE
SPECIAL DIVISION OF THE SANDIGANBAYAN,Respondents.

DECISION

BRION, J.:

The People of the Philippines (the People) filed this Petition for
Review on Certiorari1 to seek the reversal of the Sandiganbayans
Joint Resolution dated July 12, 2004, granting respondent Joseph
Ejercito Estradas (Estrada) demurrer to evidence in Crim. Case
No. 26565.2

THE FACTS
On April 4, 2001, an Information for plunder (docketed as Crim.
Case No. 26558) was filed with the Sandiganbayan against
respondent Estrada, among other accused. A separate Information
for illegal use of alias, docketed as Crim. Case No. 26565, was
likewise filed against Estrada. The Amended Information in Crim.
Case No. 26565 reads:
That on or about 04 February 2000, or sometime prior or
subsequent thereto, in the City of Manila, Philippines and within
the jurisdiction of this Honorable Court, the above-named accused,
being then President of the Republic of the Philippines, without
having been duly authorized, judicially or administratively, taking
advantage of his position and committing the offense in relation to
office, i.e., in order to CONCEAL THE ill-gotten wealth HE
ACQUIRED during his tenure and his true identity as THE
President of the Republic of the Philippines, did then and there,
willfully, unlawfully and criminally REPRESENT HIMSELF AS
JOSE VELARDE IN SEVERAL TRANSACTIONS AND use and
employ the SAID alias "Jose Velarde" which IS neither his
registered name at birth nor his baptismal name, in signing
documents with Equitable PCI Bank and/or other corporate
entities.
CONTRARY TO LAW.
Crim. Case Nos. 26565 and 26558 were subsequently
consolidated for joint trial. Still another Information, this time for
perjury and docketed as Crim. Case No. 26905, was filed with the
Sandiganbayan against Estrada. This was later consolidated, too,
with Crim. Cases No. 26558 and 26565.
Estrada was subsequently arrested on the basis of a warrant of
arrest that the Sandiganbayan issued.
On January 11, 2005, we ordered the creation of a Special Division
in the Sandiganbayan to try, hear, and decide the charges of
plunder and related cases (illegal use of alias and perjury) against
respondent Estrada.3
At the trial, the People presented testimonial and documentary
evidence to prove the allegations of the Informations for plunder,
illegal use of alias, and perjury. The Peoples evidence for the
illegal alias charge, as summarized by the Sandiganbayan,
consisted of:
A. The testimonies of Philippine Commercial and Industrial
Bank (PCIB) officers Clarissa G. Ocampo (Ocampo) and
Atty. Manuel Curato (Curato) who commonly declared that
on February 4, 2000, Estrada opened a numbered trust
account (Trust Account C-163) with PCIB and signed as
"Jose Velarde" in the account opening documents; both
Ocampo and Curato also testified that Aprodicio Lacquian
and Fernando Chua were present on that occasion;
B. (1) The testimony of PCIB-Greenhills Branch Manager
Teresa Barcelan, who declared that a certain Baby Ortaliza
(Ortaliza) transacted several times with her; that Ortaliza
deposited several checks in PCIB Savings Account No.
0160-62502-5 under the account name "Jose Velarde" on
the following dates (as evidenced by deposit receipts duly
marked in evidence):
a. 20 October 1999 (Exh. "MMMMM")
b. 8 November 1999 (Exh. "LLLLL")
c. 22 November 1999 (Exh. "NNNNN")
d. 24 November 1999 (Exh. "OOOOO")
e. 25 November 1999 (Exh. "PPPPP")
f. 20 December 1999 (Exh. "QQQQQ")
g. 21 December 1999 (Exh. "RRRRR")
h. 29 December 1999 (Exh. "SSSSS")
i. 4 January 2000 (Exh. "TTTTT")
 j. 10 May 2000 (Exh. "UUUUU")
k. 6 June 2000 (Exh. "VVVVV")
l. 25 July 2000 (Exh. "WWWWW")
(2) Documents duly identified by witnesses showing that
Lucena Ortaliza was employed in the Office of the Vice
President and, later on, in the Office of the President when
Estrada occupied these positions and when deposits were
made to the Jose Velarde Savings Account No. 0160-
62502-5.
The People filed its Formal Offer of Exhibits in the consolidated
cases, which the Sandiganbayan admitted into evidence in a
Resolution dated October 13, 2003.4 The accused separately
moved to reconsider the Sandiganbayan Resolution;5 the People,
on the other hand, filed its Consolidated Comment/Opposition to
the motions.6 The Sandiganbayan denied the motions in its
Resolution dated November 17, 2003.7
After the People rested in all three cases, the defense moved to be
allowed to file a demurrer to evidence in these cases.8 In its Joint
Resolution dated March 10, 2004,9 the Sandiganbayan only
granted the defense leave to file demurrers in Crim. Case Nos.
26565 (illegal use of alias) and 26905 (perjury).
Estrada filed separate Demurrers to Evidence for Crim. Case Nos.
26565 and 26905.10 His demurrer to evidence for Crim. Case No.
26565 (illegal use of alias) was anchored on the following
grounds11:
1. Of the thirty-five (35) witnesses presented by the
prosecution, only two (2) witnesses, Ms. Clarissa Ocampo
and Atty. Manuel Curato, testified that on one occasion (4
February 2000), they saw movant use the name "Jose
Velarde";
2. The use of numbered accounts and the like was legal
and was prohibited only in late 2001 as can be gleaned
from Bangko Sentral Circular No. 302, series of 2001, dated
11 October 2001;
3. There is no proof of public and habitual use of alias as
the documents offered by the prosecution are banking
documents which, by their nature, are confidential and
cannot be revealed without following proper procedures;
and
4. The use of alias is absorbed in plunder.
The People opposed the demurrers through a Consolidated
Opposition that presented the following arguments:12
1. That the use of fictitious names in bank transaction was
not expressly prohibited until BSP No. 302 is of no moment
considering that as early as Commonwealth Act No. 142,
the use of alias was already prohibited. Movant is being
prosecuted for violation of C.A. No. 142 and not BSP
Circular No. 302;
2. Movants reliance on Ursua vs. Court of Appeals (256
SCRA 147 [1996]) is misplaced;
3. Assuming arguendo that C.A. No. 142, as amended,
requires publication of the alias and the habitual use
thereof, the prosecution has presented more than sufficient
evidence in this regard to convict movant for illegal use of
alias; and
4. Contrary to the submission of movant, the instant case of
illegal use of alias is not absorbed in plunder.
Estrada replied to the Consolidated Opposition through a
Consolidated Reply Opposition.
THE ASSAILED SANDIGANBAYANS RULING
The Sandiganbayan issued on July 12, 2004 the Resolution now
assailed in this petition. The salient points of the assailed
resolution are:
First the coverage of Estradas indictment. The Sandiganbayan
found that the only relevant evidence for the indictment are those
relating to what is described in the Information i.e., the
testimonies and documents on the opening of Trust Account C-163
on February 4, 2000. The Sandiganbayan reasoned out that the
use of the disjunctive "or" between "on or about 04 February 2000"
and "sometime prior or subsequent thereto" means that the act/s
allegedly committed on February 4, 2000 could have actually taken
place prior to or subsequent thereto; the use of the conjunctive
was simply the prosecutions procedural tool to guard against any
variance between the date stated in the Information and that
proved during the trial in a situation in which time was not a
material ingredient of the offense; it does not mean and cannot be
read as a roving commission that includes acts and/or events
separate and distinct from those that took place on the single date
"on or about 04 February 2000 or sometime prior or subsequent
thereto." The Sandiganbayan ruled that the use of the disjunctive
"or" prevented it from interpreting the Information any other way.
Second the Peoples failure to present evidence that proved
Estradas commission of the offense. The Sandiganbayan found
that the People failed to present evidence that Estrada committed
the crime punished under Commonwealth Act No. 142, as
amended by Republic Act (R.A.) No. 6085 (CA 142), as interpreted
by the Supreme Court in Ursua v. Court of Appeals.13 It ruled that
there is an illegal use of alias within the context of CA 142 only if
the use of the alias is public and habitual. In Estradas case, the
Sandiganbayan noted, the application of the principles was not as
simple because of the complications resulting from the nature of
the transaction involved the alias was used in connection with
the opening of a numbered trust account made during the
effectivity of R.A. No. 1405, as amended,14 and prior to the
enactment of Republic R.A. No. 9160.15
Estrada did not publicly use the alias "Jose Velarde":
a. Estradas use of the alias "Jose Velarde" in his dealings
with Dichavez and Ortaliza after February 4, 2000 is not
relevant in light of the conclusion that the acts imputed to
Estrada under the Information were the act/s committed on
February 4, 2000 only. Additionally, the phrase, "Estrada
did represent himself as Jose Velarde in several
transactions," standing alone, violates Estradas right to be
informed of the nature and the cause of the accusation,
because it is very general and vague. This phrase is
qualified and explained by the succeeding phrase "and
use and employ the said alias Jose Velarde" which "is
neither his registered name at birth nor his baptismal name,
in signing documents with Equitable PCI Bank and/or other
corporate entities." Thus, Estradas representations before
persons other than those mentioned in the Information are
immaterial; Ortaliza and Dichavez do not fall within the
"Equitable PCI Bank and/or other corporate entities"
specified in the Information. Estradas representations with
Ortaliza and Dichavez are not therefore covered by the
indictment.
b. The Sandiganbayan rejected the application of the
principle in the law of libel that mere communication to a
third person is publicity; it reasoned out that that the
definition of publicity is not limited to the way it is defined
under the law on libel; additionally, the application of the
libel law definition is onerous to the accused and is
precluded by the ruling in Ursua that CA No. 142, as a
penal statute, should be construed strictly against the State
and favorably for the accused. It ruled that the definition
under the law on libel, even if it applies, considers a
communication to a third person covered by the privileged
communication rule to be non-actionable. Estradas use of
the alias in front of Ocampo and Curato is one such
privileged communication under R.A. No. 1405, as
amended. The Sandiganbayan said:
Movants act of signing "Jose Velarde" in bank documents
being absolutely confidential, the witnessing thereof by
bank officers who were likewise sworn to secrecy by the
 same law cannot be considered as public as to fall within
the ambit of CA 142 as amended. On account of the
absolute confidentiality of the transaction, it cannot be said
that movant intended to be known by this name in addition
to his real name. Confidentiality and secrecy negate
publicity. Ursua instructs:
Hence, the use of a fictitious name or a different name
belonging to another person in a single instance without any
sign or indication that the user intends to be known by this
name in addition to his real name from that day forth does
not fall within the prohibition in C.A. No. 142 as amended.
c. The Sandiganbayan further found that the intention not to
be publicly known by the name "Jose Velarde" is shown by
the nature of a numbered account a perfectly valid
banking transaction at the time Trust Account C-163 was
opened. The opening, too, of a numbered trust account, the
Sandiganbayan further ruled, did not impose on Estrada the
obligation to disclose his real identity the obligation R.A.
No. 6713 imposes is to file under oath a statement of assets
and liabilities.16 Reading CA No. 142, R.A. No. 1405 and
R.A. No. 6713 together, Estrada had the absolute obligation
to disclose his assets including the amount of his bank
deposits, but he was under no obligation at all to disclose
the other particulars of the bank account (such as the name
he used to open it).
Third the effect of the enactment of R.A. No. 9160.17 The
Sandiganbayan said that the absolute prohibition in R.A. No. 9160
against the use of anonymous accounts, accounts under fictitious
names, and all other similar accounts, is a legislative
acknowledgment that a gaping hole previously existed in our laws
that allowed depositors to hide their true identities. The
Sandiganbayan noted that the prohibition was lifted from Bangko
Sentral ng Pilipinas (BSP) Circular No. 251 dated July 7, 2000
another confirmation that the opening of a numbered trust account
was perfectly legal when it was opened on February 4, 2000.
The Sandiganbayan ruled that the provisions of CA No. 142, as
interpreted in Ursua, must necessarily be harmonized with the
provisions of R.A. No.1405 and R.A. No. 9160 under the principle
that every statute should be construed in a way that will harmonize
it with existing laws. A reasonable scrutiny, the Sandiganbayan
said, of all these laws in relation to the present case, led it to
conclude that the use of an alias within the context of a bank
transaction (specifically, the opening of a numbered account made
before bank officers) is protected by the secrecy provisions of R.A.
No. 1405, and is thus outside the coverage of CA No. 142 until the
passage into law of R.A. No. 9160.
THE PETITION
The People filed this petition raising the following issues:
1. Whether the court a quo gravely erred and abused its
discretion in dismissing Crim. Case No. 26565 and in
holding that the use by respondent Joseph Estrada of his
alias "Jose Velarde" was not public despite the presence of
Messrs. Aprodicio Laquian and Fernando Chua on 4
February 2000;
2. Whether the court a quo gravely erred and abused its
discretion in dismissing Crim. Case No. 26565 and in
holding that the use by respondent Joseph Estrada of his
alias "Jose Velarde" was allowable under banking rules,
despite the clear prohibition under Commonwealth Act No.
142;
3. Whether the court a quo gravely erred and abused its
discretion in dismissing Crim. Case No. 26565 and in
applying R.A. No. 1405 as an exception to the illegal use of
alias punishable under Commonwealth Act No. 142;
4. Whether the alleged harmonization and application made
by the court a quo of R.A. No.1405 and Commonwealth Act
No. 142 were proper;
 5. Whether the court a quo gravely erred and abused its
discretion in limiting the coverage of the amended
Information in Crim. Case No. 26565 to the use of the alias
"Jose Velarde" by respondent Joseph Estrada on February
4, 2000;
6. Whether the court a quo gravely erred and abused its
discretion in departing from its earlier final finding on the
non-applicability of Ursua v. Court of Appeals and forcing its
application to the instant case.
THE COURTS RULING
The petition has no merit.
The Law on Illegal Use of Alias and the Ursua Ruling
Sections 1 and 2 of CA No. 142, as amended, read:
Section 1. Except as a pseudonym solely for literary, cinema,
television, radio or other entertainment purposes and in athletic
events where the use of pseudonym is a normally accepted
practice, no person shall use any name different from the one with
which he was registered at birth in the office of the local civil
registry or with which he was baptized for the first time, or in case
of an alien, with which he was registered in the bureau of
immigration upon entry; or such substitute name as may have
been authorized by a competent court: Provided, That persons
whose births have not been registered in any local civil registry and
who have not been baptized, have one year from the approval of
this act within which to register their names in the civil registry of
their residence. The name shall comprise the patronymic name
and one or two surnames.
Section 2. Any person desiring to use an alias shall apply for
authority therefor in proceedings like those legally provided to
obtain judicial authority for a change of name and no person shall
be allowed to secure such judicial authority for more than one
alias. The petition for an alias shall set forth the person's baptismal
and family name and the name recorded in the civil registry, if
different, his immigrant's name, if an alien, and his pseudonym, if
he has such names other than his original or real name, specifying
the reason or reasons for the desired alias. The judicial authority
for the use of alias, the Christian name and the alien immigrant's
name shall be recorded in the proper local civil registry, and no
person shall use any name or names other than his original or real
name unless the same is or are duly recorded in the proper local
civil registry.
How this law is violated has been answered by the Ursua definition
of an alias "a name or names used by a person or intended to be
used by him publicly and habitually usually in business
transactions in addition to his real name by which he is registered
at birth or baptized the first time or substitute name authorized by a
competent authority." There must be, in the words of Ursua, a "sign
or indication that the user intends to be known by this name (the
alias) in addition to his real name from that day forth [for the use
of alias to] fall within the prohibition contained in C.A. No. 142 as
amended."18
Ursua further relates the historical background and rationale that
led to the enactment of CA No. 142, as follows:
The enactment of C.A. No. 142 was made primarily to curb the
common practice among the Chinese of adopting scores of
different names and aliases which created tremendous confusion
in the field of trade. Such a practice almost bordered on the crime
of using fictitious names which for obvious reasons could not be
successfully maintained against the Chinese who, rightly or
wrongly, claimed they possessed a thousand and one names. C.A.
No. 142 thus penalized the act of using an alias name, unless such
alias was duly authorized by proper judicial proceedings and
recorded in the civil register.19
Following the doctrine of stare decisis,20 we are guided by the
Ursua ruling on how the crime punished under CA No. 142 may be
committed. Close adherence to this ruling, in other words, is
unavoidable in the application of and the determination of criminal
liability under CA No. 142.
Among the many grounds the People invokes to avoid the
application of the Ursua ruling proceeds from Estradas position in
the government; at the time of the commission of the offense, he
was the President of the Republic who is required by law to
disclose his true name. We do not find this argument sufficient to
justify a distinction between a man on the street, on one hand, and
the President of the Republic, on the other, for purposes of
applying CA No. 142. In the first place, the law does not make any
distinction, expressly or impliedly, that would justify a differential
treatment. CA No. 142 as applied to Estrada, in fact allows him to
use his cinema or screen name of Joseph Estrada, which name he
has used even when he was already the President of the
Philippines. Even the petitioner has acquiesced to the use of the
screen name of the accused, as shown by the title of the present
petition. Additionally, any distinction we make based on the
Peoples claim unduly prejudices Estrada; this is proscribed by the
Ursua dictum that CA No. 142, as a penal statute, should be
construed strictly against the State and in favor of the
accused.21 The mode of violating CA No. 142 is therefore the same
whoever the accused may be.
The People also calls our attention to an earlier Sandiganbayan
ruling (Resolution dated February 6, 2002) denying Estradas
motion to quash the Information. This earlier Resolution effectively
rejected the application of Ursua under the following tenor:
The use of the term "alias" in the Amended Information in itself
serves to bring this case outside the ambit of the ruling in the case
of Ursua v. Court of Appeals (256 SCRA 147 [1996]), on which the
accused heavily relies in his motion to quash. The term "alias"
means "otherwise known as" (Webster Third New International
Dictionary, 1993 ed., p. 53). The charge of using an "alias" logically
implies that another name has been used publicly and habitually.
Otherwise, he will not be known by such name. In any case, the
amended information adverts to "several transactions" and signing
of documents with the Equitable PCI Bank and/or other corporate
entities where the above-mentioned alias was allegedly employed
by the accused.
The facts alleged in the information are distinctly different from
facts established in the Ursua case where another name was used
by the accused in a single instance without any sign or indication
that that [sic] he intended to be known from that day by this name
in addition to his real name.22
The People argues that the Sandiganbayan gravely abused its
discretion in applying Ursua notwithstanding this earlier final ruling
on its non-applicability a ruling that binds the parties in the
present case. The People thus claims that the Sandiganbayan
erred to the point of gravely abusing its discretion when it
resurrected the application of Ursua, resulting in the reversal of its
earlier final ruling.
We find no merit in this argument for two reasons. First, the cited
Sandiganbayan resolution is a mere interlocutory order a ruling
denying a motion to quash23 that cannot be given the attributes
of finality and immutability that are generally accorded to
judgments or orders that finally dispose of the whole, of or
particular matters in, a case.24 The Sandiganbayan resolution is a
mere interlocutory order because its effects would only be
provisional in character, and would still require the issuing court to
undertake substantial proceedings in order to put the controversy
to rest.25 It is basic remedial law that an interlocutory order is
always under the control of the court and may be modified or
rescinded upon sufficient grounds shown at any time before final
judgment.26 Perez v. Court of Appeals,27 albeit a civil case,
instructively teaches that an interlocutory order carries no res
adjudicata effects. Says Perez:
The Decision in CA-G.R. No. 10415 having resolved only an
interlocutory matter, the principle of res judicatacannot be applied
in this case. There can be no res judicata where the previous order
in question was not an order or judgment determinative of an issue
of fact pending before the court but was only an interlocutory order
because it required the parties to perform certain acts for final
adjudication. In this case, the lifting of the restraining order paved
the way for the possession of the fishpond on the part of
petitioners and/or their representatives pending the resolution of
the main action for injunction. In other words, the main issue of
whether or not private respondent may be considered a sublessee
or a transferee of the lease entitled to possess the fishpond under
the circumstances of the case had yet to be resolved when the
restraining order was lifted.28
Second, in the earlier motion to quash, the Sandiganbayan solely
looked at the allegations of the Information to determine the
sufficiency of these allegations and did not consider any evidence
aliunde. This is far different from the present demurrer to evidence
where the Sandiganbayan had a fuller view of the prosecutions
case, and was faced with the issue of whether the prosecutions
evidence was sufficient to prove the allegations of the Information.
Under these differing views, the Sandiganbayan may arrive at a
different conclusion on the application of Ursua, the leading case in
the application of CA 142, and the change in ruling is not per se
indicative of grave abuse of discretion. That there is no error of law
is strengthened by our consideration of the Sandiganbayan ruling
on the application of Ursua.
In an exercise of caution given Ursuas jurisprudential binding
effect, the People also argues in its petition that Estradas case is
different from Ursuas for the following reasons: (1) respondent
Estrada used and intended to continually use the alias "Jose
Velarde" in addition to the name "Joseph Estrada"; (2) Estradas
use of the alias was not isolated or limited to a single transaction;
and (3) the use of the alias "Jose Velarde" was designed to cause
and did cause "confusion and fraud in business transactions"
which the anti-alias law and its related statutes seek to prevent.
The People also argues that the evidence it presented more than
satisfied the requirements of CA No. 142, as amended, and Ursua,
as it was also shown or established that Estradas use of the alias
was public.
In light of our above conclusions and based on the parties
expressed positions, we shall now examine within the Ursua
framework the assailed Sandiganbayan Resolution granting the
demurrer to evidence. The prosecution has the burden of proof to
show that the evidence it presented with the Sandiganbayan
satisfied the Ursua requirements, particularly on the matter of
publicity and habituality in the use of an alias.
What is the coverage of the indictment?
The People argues that the Sandiganbayan gravely erred and
abused its discretion in limiting the coverage of the amended
Information in Crim. Case No. 26565 to Estradas use of the alias
"Jose Velarde" on February 4, 2000. It posits that there was a main
transaction one that took place on February 4, 2000 but there
were other transactions covered by the phrase "prior to or
subsequent thereto; the Information specifically referred to "several
transactions" "with Equitable PCI Bank and/or other corporate
entities." To the People, the restrictive finding that the phrase
"prior to or subsequent thereto" is absorbed by the phrase "on or
about 04 February 2000" drastically amends the succeeding
main allegations on the constitutive criminal acts by removing the
plurality of both the transactions involved and the documents
signed with various entities; there is the undeniable essential
relationship between the allegations of the multiplicity of
transactions, on one hand, and the additional antecedent of "prior
to or subsequent thereto," on the other. It argues that the
Sandiganbayan reduced the phrase "prior to or subsequent
thereto" into a useless appendage, providing Estrada with a
convenient and totally unwarranted escape route.
The People further argues that the allegation of time is the least
exacting in satisfying the constitutional requirement that the
accused has to be informed of the accusation against him. Section
6 of Rule 110 of the Revised Rules of Court provides that an
allegation of the approximate date of the commission of the
offense will suffice, while Section 11 of the same Rule provides
that it is not necessary to state in the complaint or information the
precise date the offense was committed except when it is a
material ingredient of the crime. This liberality allegedly shaped the
time-tested rule that when the "time" given in the complaint is not
of the essence of the offense, the time of the commission of the
offense does not need to be proven as alleged, and that the
complaint will be sustained if the proof shows that the offense was
committed at any time within the period of the statute of limitations
and before the commencement of the action (citing People v.
Bugayong [299 SCRA 528, 537] that in turn cited US v. Smith [3
Phil. 20, 22]). Since allegations of date of the commission of an
offense are liberally interpreted, the People posits that the
Sandiganbayan gravely abused its discretion in disregarding the
additional clause "prior to or subsequent thereto"; under the
liberality principle, the allegations of the acts constitutive of the
offense finally determine the sufficiency of the allegations of time.
The People thus claims that no surprise could have taken place
that would prevent Estrada from properly defending himself; the
information fully notified him that he was being accused of using
the alias Jose Velarde in more than just one instance.
We see no merit in these arguments.
At its core, the issue is constitutional in nature the right of
Estrada to be informed of the nature and cause of the accusation
against him. Under the provisions of the Rules of Court
implementing this constitutional right, a complaint or information is
sufficient if it states the name of the accused; the designation of
the offense given by the statute; the acts or omissions complained
of as constituting the offense in the name of the offended party; the
approximate date of the commission of the offense; and the place
where the offense was committed.29 As to the cause of accusation,
the acts or omissions complained of as constituting the offense
and the qualifying and aggravating circumstances must be stated
in ordinary and concise language and not necessarily in the
language used in the statute, but in terms sufficient to enable a
person of common understanding to know the offense charged and
the qualifying and aggravating circumstances, and for the court to
pronounce judgment.30 The date of the commission of the offense
need not be precisely stated in the complaint or information except
when the precise date is a material ingredient of the offense. The
offense may be alleged to have been committed on a date as near
as possible to the actual date of its commission.31
The information must at all times embody the essential elements of
the crime charged by setting forth the facts and circumstances that
bear on the culpability and liability of the accused so that he can
properly prepare for and undertake his defense.32 In short, the
allegations in the complaint or information, as written, must fully
inform or acquaint the accused the primary reader of and the
party directly affected by the complaint or information of the
charge/s laid.
The heretofore cited Information states that " on or about 04
February 2000, or sometime prior or subsequent thereto, in the
City of Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused [did] willfully,
unlawfully and criminally REPRESENT HIMSELF AS JOSE
VELARDE IN SEVERAL TRANSACTIONS AND use and employ
the SAID alias "Jose Velarde" which IS neither his registered name
at birth nor his baptismal name, in signing documents with
Equitable PCI Bank and/or other corporate entities."
We fully agree with the disputed Sandiganbayans reading of the
Information, as this was how the accused might have similarly read
and understood the allegations in the Information and, on this
basis, prepared his defense. Broken down into its component
parts, the allegation of time in the Information plainly states that (1)
ON February 4, 2000; (2) OR before February 4, 2000; (3) OR
sometime prior or subsequent to February 4, 2000, in the City of
Manila, Estrada represented himself as "Jose Velarde" in several
transactions in signing documents with Equitable PCI Bank and/or
other corporate entities.
Under this analysis, the several transactions involving the signing
of documents with Equitable PCI Bank and/or other corporate
entities all had their reference to February 4, 2000; they were all
made on or about or prior or subsequent to that date, thus plainly
implying that all these transactions took place only on February 4,
2000 or on another single date sometime before or after February
4, 2000. To be sure, the Information could have simply said "on or
about February 4, 2000" to capture all the alternative approximate
dates, so that the phrase "sometime prior or subsequent thereto"
would effectively be a surplusage that has no meaning separately
from the "on or about" already expressed. This consequent
uselessness of the "prior or subsequent thereto" phrase cannot be
denied, but it is a direct and necessary consequence of the use of
the "OR" between the two phrases and the "THERETO" that
referred back to February 4, 2000 in the second phrase. Of course,
the reading would have been very different (and would have been
clearly in accord with the Peoples present interpretation) had the
Information simply used "AND" instead of "OR" to separate the
phrases; the intent to refer to various transactions occurring on
various dates and occasions all proximate to February 4, 2000
could not be disputed. Unfortunately for the People, the
imprecision in the use of "OR" is the reality the case has to live
with. To act contrary to this reality would violate Estradas right to
be informed of the nature and cause of accusation against him; the
multiple transactions on several separate days that the People
claims would result in surprise and denial of an opportunity to
prepare for Estrada, who has a right to rely on the single day
mentioned in the Information.
Separately from the constitutional dimension of the allegation of
time in the Information, another issue that the allegation of time
and our above conclusion raise relates to what act or acts,
constituting a violation of the offense charged, were actually
alleged in the Information.1avvphi1
The conclusion we arrived at necessarily impacts on the Peoples
case, as it deals a fatal blow on the Peoples claim that Estrada
habitually used the Jose Velarde alias. For, to our mind, the
repeated use of an alias within a single day cannot be deemed
"habitual," as it does not amount to a customary practice or use.
This reason alone dictates the dismissal of the petition under CA
No. 142 and the terms of Ursua.
The issues of publicity, numbered accounts, and
the application of CA No. 142, R.A. No. 1405,
and R.A. No. 9160.
We shall jointly discuss these interrelated issues.
The People claims that even on the assumption that Ocampo and
Curato are bank officers sworn to secrecy under the law, the
presence of two other persons who are not bank officers
Aprodicio Laquian and Fernando Chua when Estradas signed
the bank documents as "Jose Velarde" amounted to a "public" use
of an alias that violates CA No. 142.
On the issue of numbered accounts, the People argues that to
premise the validity of Estradas prosecution for violation of CA No.
142 on a mere banking practice is gravely erroneous, improper,
and constitutes grave abuse of discretion; no banking law provision
allowing the use of aliases in the opening of bank accounts
existed; at most, it was allowed by mere convention or industry
practice, but not by a statute enacted by the legislature.
Additionally, that Estradas prosecution was supposedly based on
BSP Circular No. 302 dated October 11, 2001 is wrong and
misleading, as Estrada stands charged with violation of CA No.
142, penalized since 1936, and not with a violation of a mere BSP
Circular. That the use of alias in bank transactions prior to BSP
Circular No. 302 is allowed is inconsequential because as early as
CA No. 142, the use of an alias (except for certain purposes which
do not include banking) was already prohibited. Nothing in CA No.
142 exempted the use of aliases in banking transactions, since the
law did not distinguish or limit its application; it was therefore grave
error for the Sandiganbayan to have done so. Lastly on this point,
bank regulations being mere issuances cannot amend, modify or
prevail over the effective, subsisting and enforceable provision of
CA No. 142.
On the issue of the applicability of R.A. No. 1405 and its
relationship with CA No. 142, that since nothing in CA No. 142
excuses the use of an alias, the Sandiganbayan gravely abused its
discretion when it ruled that R.A. No. 1405 is an exception to CA
No. 142s coverage. Harmonization of laws, the People posits, is
allowed only if the laws intended to be harmonized refer to the
same subject matter, or are at least related with one another. The
three laws which the Sandiganbayan tried to harmonize are not
remotely related to one another; they each deal with a different
subject matter, prohibits a different act, governs a different
conduct, and covers a different class of persons,33 and there was
no need to force their application to one another. Harmonization of
laws, the People adds, presupposes the existence of conflict or
incongruence between or among the provisions of various laws, a
situation not obtaining in the present case.
The People posits, too, that R.A. No. 1405 does not apply to trust
transactions, such as Trust Account No. C-163, as it applies only to
traditional deposits (simple loans). A trust account, according to the
People, may not be considered a deposit because it does not
create the juridical relation of creditor and debtor; trust and deposit
operations are treated separately and are different in legal
contemplation; trust operation is separate and distinct from banking
and requires a grant of separate authority, and trust funds are not
covered by deposit insurance under the Philippine Deposit
Insurance Corporation law (R.A. No. 3591, as amended).
The People further argues that the Sandiganbayans conclusion
that the transaction or communication was privileged in nature was
erroneous a congruent interpretation of CA No. 142 and R.A. No.
1405 shows that a person who signs in a public or private
transaction a name or alias, other than his original name or the
alias he is authorized to use, shall be held liable for violation of CA
No. 142, while the bank employees are bound by the confidentiality
of bank transactions except in the circumstances enumerated in
R.A. No. 1405. At most, the People argues, the prohibition in R.A.
No. 1405 covers bank employees and officers only, and not
Estrada; the law does not prohibit Estrada from disclosing and
making public his use of an alias to other people, including
Ocampo and Curato, as he did when he made a public exhibit and
use of the alias before Messrs. Lacquian and Chua.
Finally, the People argues that the Sandiganbayan ruling that the
use of an alias before bank officers does not violate CA No. 142
effectively encourages the commission of wrongdoing and the
concealment of ill-gotten wealth under pseudonyms; it sustains an
anomalous and prejudicial policy that uses the law to silence bank
officials and employees from reporting the commission of crimes.
The People contends that the law R.A. No. 1405 was not
intended by the Legislature to be used as a subterfuge or
camouflage for the commission of crimes and cannot be so
interpreted; the law can only be interpreted, understood and
applied so that right and justice would prevail.
We see no merit in these arguments.
We agree, albeit for a different reason, with the Sandiganbayan
position that the rule in the law of libel that mere communication
to a third person is publicity does not apply to violations of CA
No. 142. Our close reading of Ursua particularly, the requirement
that there be intention by the user to be culpable and the historical
reasons we cited above tells us that the required publicity in the
use of alias is more than mere communication to a third person;
the use of the alias, to be considered public, must be made openly,
or in an open manner or place, or to cause it to become generally
known. In order to be held liable for a violation of CA No. 142, the
user of the alias must have held himself out as a person who shall
publicly be known under that other name. In other words, the intent
to publicly use the alias must be manifest.
To our mind, the presence of Lacquian and Chua when Estrada
signed as Jose Velarde and opened Trust Account No. C-163 does
not necessarily indicate his intention to be publicly known
henceforth as Jose Velarde. In relation to Estrada, Lacquian and
Chua were not part of the public who had no access to Estradas
privacy and to the confidential matters that transpired in Malacaan
where he sat as President; Lacquian was the Chief of Staff with
whom he shared matters of the highest and strictest confidence,
while Chua was a lawyer-friend bound by his oath of office and ties
of friendship to keep and maintain the privacy and secrecy of his
affairs. Thus, Estrada could not be said to have intended his
signing as Jose Velarde to be for public consumption by the fact
alone that Lacquian and Chua were also inside the room at that
time. The same holds true for Estradas alleged representations
with Ortaliza and Dichavez, assuming the evidence for these
representations to be admissible. All of Estradas representations
to these people were made in privacy and in secrecy, with no iota
of intention of publicity.
The nature, too, of the transaction on which the indictment rests,
affords Estrada a reasonable expectation of privacy, as the alleged
criminal act related to the opening of a trust account a
transaction that R.A. No. 1405 considers absolutely confidential in
nature.34 We previously rejected, in Ejercito v.
Sandiganbayan, the Peoples nitpicking argument on the alleged
35
dichotomy between bank deposits and trust transactions, when we
said:
The contention that trust accounts are not covered by the term
"deposits," as used in R.A. 1405, by the mere fact that they do not
entail a creditor-debtor relationship between the trustor and the
bank, does not lie. An examination of the law shows that the term
"deposits" used therein is to be understood broadly and not limited
only to accounts which give rise to a creditor-debtor relationship
between the depositor and the bank.
The policy behind the law is laid down in Section 1:
SECTION 1. It is hereby declared to be the policy of the
Government to give encouragement to the people to deposit their
money in banking institutions and to discourage private hoarding
so that the same may be properly utilized by banks in authorized
loans to assist in the economic development of the country.
(Underscoring supplied)
If the money deposited under an account may be used by bank for
authorized loans to third persons, then such account, regardless of
whether it creates a creditor-debtor relationship between the
depositor and the bank, falls under the category of accounts which
the law precisely seeks to protect for the purpose of boosting the
economic development of the country.
Trust Account No. 858 is, without doubt, one such account. The
Trust Agreement between petitioner and Urban Bank provides that
the trust account covers "deposit, placement or investment of
funds" by Urban Bank for and in behalf of petitioner. The money
deposited under Trust Account No. 858, was, therefore, intended
not merely to remain with the bank but to be invested by it
elsewhere. To hold that this type of account is not protected by
R.A. 1405 would encourage private hoarding of funds that could
otherwise be invested by bank in other ventures, contrary to the
policy behind the law.
Section 2 of the same law in fact even more clearly shows that the
term "deposits" was intended to be understood broadly:
SECTION 2. All deposits of whatever nature with bank or banking
institutions in the Philippines including investments in bonds issued
by the Government of the Philippines, its political subdivisions and
its instrumentalities, are hereby considered as of an absolutely
confidential nature and may not be examined, inquired or looked
into by any person, government official, bureau or
office, except upon written permission of the depositor, or in cases
of impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases where
the money deposited or invested is the subject matter of the
litigation. (Emphasis and underscoring supplied)1avvphi1
The phrase "of whatever nature" proscribes any restrictive
interpretation of "deposits." Moreover, it is clear from the
immediately quoted provision that, generally, the law applies not
only to money which is deposited but also to those which
are invested. This further shows that the law was not intended to
apply only to "deposits" in the strict sense of the
word.lawphil.net Otherwise, there would have been no need to add
the phrase "or invested.
Clearly, therefore, R.A. 1405 is broad enough to cover Trust
Account No. 858.36
We have consistently ruled that bank deposits under R.A. No.
1405 (the Secrecy of Bank Deposits Law) are statutorily protected
or recognized zones of privacy.37 Given the private nature of
Estradas act of signing the documents as "Jose Velarde" related
to the opening of the trust account, the People cannot claim that
there was already a public use of alias when Ocampo and Curato
witnessed the signing. We need not even consider here the impact
of the obligations imposed by R.A. No.1405 on the bank officers;
what is essentially significant is the privacy situation that is
necessarily implied in these kinds of transactions. This statutorily
guaranteed privacy and secrecy effectively negate a conclusion
that the transaction was done publicly or with the intent to use the
alias publicly.
The enactment of R.A. No.9160, on the other hand, is a significant
development only because it clearly manifests that prior to its
enactment, numbered accounts or anonymous accounts were
permitted banking transactions, whether they be allowed by law or
by a mere banking regulation. To be sure, an indictment against SO ORDERED.
Estrada using this relatively recent law cannot be maintained
without violating the constitutional prohibition on the enactment
and use of ex post facto laws.38

We hasten to add that this holistic application and interpretation of

these various laws is not an attempt to harmonize these laws. A
finding of commission of the offense punished under CA No. 142
must necessarily rest on the evidence of the requisites for
culpability, as amplified in Ursua. The application of R.A. No. 1405
is significant only because Estradas use of the alias was pursuant
to a transaction that the law considers private or, at the very least,
where the law guarantees a reasonable expectation of privacy to
the parties to the transactions; it is at this point that R.A. No. 1405
tangentially interfaces with an indictment under CA 142. In this
light, there is no actual frontal clash between CA No. 142 and R.A.
No. 1405 that requires harmonization. Each operates within its own
sphere, but must necessarily be read together when these spheres
interface with one another. Finally, R.A. No. 9160, as a law of
recent vintage in relation to the indictment against Estrada, cannot
be a source or an influencing factor in his indictment.

In finding the absence of the requisite publicity, we simply looked

at the totality of the circumstances obtaining in Estradas use of the
alias "Jose Velarde" vis--vis the Ursua requisites. We do not
decide here whether Estradas use of an alias when he occupied
the highest executive position in the land was valid and legal; we
simply determined, as the Sandiganbayan did, whether he may be
made liable for the offense charged based on the evidence the
People presented. As with any other accused, his guilt must be
based on the evidence and proof beyond reasonable doubt that a
finding of criminal liability requires. If the People fails to discharge
this burden, as they did fail in this case, the rule of law requires
that we so declare. We do so now in this review and accordingly
find no reversible error of law in the assailed Sandiganbayan
ruling.

WHEREFORE, premises considered, we DENY the petition for

lack of merit.