Republic vs. Glasgow Credit and Collection Services, Inc.

A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture proceeding under RA 9160, as amended.

The Anti-Money Laundering Council (AMLC) investigated Glasgow Credit and Collection Services, Inc. (Glasgow) based on suspicious transaction reports indicating its involvement in estafa and violations of the Securities Regulation Code. Finding that Glasgow's bank account with Citystate Savings Bank, Inc. (CSBI) contained proceeds of these unlawful activities, the Republic, represented by the AMLC, filed a complaint for civil forfeiture.

• The Unlawful Activity and Account: Glasgow held account number CA-005-10-000121-5 with CSBI, containing ₱21,301,430.28. Suspicious transaction reports indicated that the funds were related to unlawful activities, specifically estafa and violation of the Securities Regulation Code. The AMLC issued resolutions directing the issuance of freeze orders against the account.
• The Forfeiture Complaint and Injunction: On July 18, 2003, the Republic filed a complaint for civil forfeiture under RA 9160. The RTC issued a 72-hour TRO on July 21, 2003, and a writ of preliminary injunction on August 8, 2003, effectively placing the account under the court's control.
• Service of Summons Difficulties: Glasgow could no longer be found at its last known address, having left without a forwarding address since July 2002. The original summons and alias summons were both returned unserved. The Republic filed a motion for leave to serve summons by publication as early as October 8, 2003, but the trial court repeatedly deferred action on it.
• The RTC Dismissal: On August 11, 2005, Glasgow filed a motion to dismiss by way of special appearance, arguing lack of jurisdiction over its person, prematurity of the complaint due to lack of prior conviction, and failure to prosecute. The trial court dismissed the case on October 27, 2005, on the grounds of improper venue (claiming it should have been filed in Pasig where the bank was located), insufficiency of the complaint in form and substance, and failure to prosecute. The trial court also lifted the writ of preliminary injunction.

• Proper Venue: Petitioner argued that the action was quasi in rem, and venue was properly laid in Manila under the Rule of Procedure in Cases of Civil Forfeiture, which allows filing in any RTC of the judicial region where the property is located.
• Sufficiency of Complaint: Petitioner maintained that a prior conviction for an unlawful activity is not a precondition to filing a civil forfeiture case, and the complaint alleged ultimate facts sufficient to establish a cause of action.
• No Failure to Prosecute: Petitioner contended that the delay in serving summons was not due to a lack of diligence on its part, but rather because Glasgow had abandoned its registered address, and the trial court had failed to resolve the pending motion for service by publication.

• Lack of Jurisdiction Over the Person: Respondent countered that the trial court had no jurisdiction over its person because summons had not been served.
• Premature Complaint/Lack of Cause of Action: Respondent argued that the complaint was premature and stated no cause of action because there was still no conviction for estafa or other criminal violations implicating Glasgow.
• Failure to Prosecute: Respondent maintained that there was failure to prosecute on the part of the Republic due to the delay in serving summons.

• Venue: Whether the RTC Manila was the proper venue for the civil forfeiture complaint.
• Sufficiency of Complaint: Whether the complaint stated a cause of action despite the absence of a prior criminal conviction for the unlawful activity.
• Failure to Prosecute: Whether the Republic was guilty of failure to prosecute warranting the dismissal of the complaint.
• Service of Summons by Publication: Whether service of summons by publication is permissible in civil forfeiture proceedings under RA 9160.

• Venue: Venue was properly laid in Manila. The motu proprio dismissal of the complaint on the ground of improper venue was plain error. Under Section 3, Title II of A.M. No. 05-11-04-SC (Rule of Procedure in Cases of Civil Forfeiture), a petition for civil forfeiture may be filed in any RTC of the judicial region where the monetary instrument is located. Because both Manila and Pasig City are within the National Capital Judicial Region, the RTC Manila was a proper venue.
• Sufficiency of Complaint: The complaint was sufficient in form and substance. A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture proceeding. The complaint substantially complied with the requirements of Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture, and the conditions of Section 12(a) of RA 9160 were satisfied by the existence of suspicious transaction reports and the issuance of a preliminary injunction placing the res under the court's control.
• Failure to Prosecute: No failure to prosecute was found. The delay was not primarily attributable to the Republic but to Glasgow's unexplained disappearance and the trial court's inaction on the motion for leave to serve summons by publication. Dismissal on the ground of non prosequitur requires a pattern or scheme to delay or a wanton failure to observe the rules, which was absent here.
• Service of Summons by Publication: Service of summons by publication is allowed in civil forfeiture proceedings. Forfeiture proceedings are actions in rem, where jurisdiction over the person of the defendant is not a prerequisite, provided the court acquires jurisdiction over the res. Under Section 8, Title II of the Rule of Procedure in Cases of Civil Forfeiture, service by publication is permitted when the respondent's whereabouts are unknown and cannot be ascertained by diligent inquiry.

• Civil Forfeiture as an Action In Rem — Forfeiture proceedings are actions in rem, directed against the property itself rather than the person. Jurisdiction over the person of the defendant is not a prerequisite to conferring jurisdiction on the court, provided the court acquires jurisdiction over the res. The court applied this to allow service of summons by publication and to justify the proceeding despite lack of personal jurisdiction over Glasgow.
• Prior Conviction Not Required for Civil Forfeiture — A finding of guilt for an unlawful activity is not an essential element of civil forfeiture under RA 9160, as amended. Regardless of the absence, pendency, or outcome of a criminal prosecution, an action for civil forfeiture may be separately and independently prosecuted and resolved.
• Dismissal for Failure to Prosecute — The real test for the exercise of the power to dismiss on the ground of non prosequitur is whether the 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, courts should dispense with rather than wield their authority to dismiss.

• "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."
• "No prior criminal charge, pendency of or conviction for an unlawful activity or money laundering offense is necessary for the commencement or the resolution of a petition for civil forfeiture."
• "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 actions in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to conferring jurisdiction on the court, provided that the court acquires jurisdiction over the res."

• Dacoycoy v. Intermediate Appellate Court, G.R. No. 74854, April 2, 1991 — Followed. The Court cited this case to establish that the motu proprio dismissal of a complaint on the ground of improper venue is plain error.
• Republic v. Sandiganbayan, 461 Phil. 598 (2003) — Followed. The Court relied on this case to declare that forfeiture proceedings are actions in rem, whether under RA 1379 or RA 9160.
• Marahay v. Melicor, G.R. No. 44980, February 6, 1990 — Followed. The Court cited this case to define the test for dismissing a case on the ground of failure to prosecute, emphasizing the need for want of due diligence.

• Section 3, Title II, A.M. No. 05-11-04-SC (Rule of Procedure in Cases of Civil Forfeiture) — Provides that a petition for civil forfeiture shall be filed in any RTC of the judicial region where the monetary instrument or property is located. Applied to establish that Manila was a proper venue since it is within the same judicial region as Pasig.
• Section 4, Title II, A.M. No. 05-11-04-SC — Enumerates the contents of a petition for civil forfeiture. Applied to determine that the Republic's complaint substantially conformed with the required form and substance.
• Section 8, Title II, A.M. No. 05-11-04-SC — Allows service of summons by publication in civil forfeiture cases when the respondent's whereabouts are unknown and cannot be ascertained by diligent inquiry. Applied to justify directing the trial court to allow service by publication.
• Section 12(a), RA 9160 (AMLA), as amended — Provides the conditions for civil forfeiture: when there is a suspicious transaction report and the court has ordered seizure of the property. Applied to show that the issuance of the writ of preliminary injunction satisfied the requirement of placing the res under the court's control.
• Section 27, A.M. No. 05-11-04-SC — Explicitly states that no prior criminal charge, pendency, or conviction is necessary for the commencement or resolution of a petition for civil forfeiture. Applied to reject the argument that the complaint was premature due to the absence of a prior conviction.

Puno, C.J., Chairperson, Sandoval-Gutierrez, Azcuna, Leonardo-de Castro, JJ.