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Negotiable Instruments Law

Section 1. Form of negotiable instruments. - An instrument to be negotiable must


conform to the following requirements:

(a) It must be in writing and signed by the maker or drawer;


(b) Must contain an unconditional promise or order to pay a sum certain in money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated
therein with reasonable certainty.

Sec. 2. What constitutes certainty as to sum. - The sum payable is a sum certain within
the meaning of this Act, although it is to be paid:

(a) with interest; or


(b) by stated installments; or
(c) by stated installments, with a provision that, upon default in payment of any installment
or of interest, the whole shall become due; or
(d) with exchange, whether at a fixed rate or at the current rate; or
(e) with costs of collection or an attorney's fee, in case payment shall not be made at maturity.

Sec. 3. When promise is unconditional. - An unqualified order or promise to pay is


unconditional within the meaning of this Act though coupled with:

(a) An indication of a particular fund out of which reimbursement is to be made or a particular


account to be debited with the amount; or
(a) A statement of the transaction which gives rise to the instrument. But an order or promise
to pay out of a particular fund is not unconditional.

Sec. 4. Determinable future time; what constitutes. - An instrument is payable at a


determinable future time, within the meaning of this Act, which is expressed to be
payable:

(a) At a fixed period after date or sight; or


(b) On or before a fixed or determinable future time specified therein; or
(c) On or at a fixed period after the occurrence of a specified event which is certain to happen,
though the time of happening be uncertain. An instrument payable upon a contingency is
not negotiable, and the happening of the event does not cure the defect.

Sec. 5. Additional provisions not affecting negotiability. - An instrument which


contains an order or promise to do any act in addition to the payment of money is not
negotiable. But the negotiable character of an instrument otherwise negotiable is not
affected by a provision which:
(a) authorizes the sale of collateral securities in case the instrument be not paid at maturity;
or
(b) authorizes a confession of judgment if the instrument be not paid at maturity; or
(c) waives the benefit of any law intended for the advantage or protection of the obligor; or
(d) gives the holder an election to require something to be done in lieu of payment of money.

But nothing in this section shall validate any provision or stipulation otherwise illegal.

Sec. 6. Omissions; seal; particular money. - The validity and negotiable character of
an instrument are not affected by the fact that:

(a) it is not dated; or


(b) does not specify the value given, or that any value had been given therefor; or
(c) does not specify the place where it is drawn or the place where it is payable; or
(d) bears a seal; or
(e) designates a particular kind of current money in which payment is to be made.

But nothing in this section shall alter or repeal any statute requiring in certain cases the nature
of the consideration to be stated in the instrument.

Sec. 7. When payable on demand. - An instrument is payable on demand:

(a) When it is so expressed to be payable on demand, or at sight, or on presentation; or


(b) In which no time for payment is expressed.

Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person
so issuing, accepting, or indorsing it, payable on demand.

Sec. 8. When payable to order. - The instrument is payable to order where it is drawn
payable to the order of a specified person or to him or his order. It may be drawn
payable to the order of:

(a) A payee who is not maker, drawer, or drawee; or


(b) The drawer or maker; or
(c) The drawee; or
(d) Two or more payees jointly; or
(e) One or some of several payees; or
(f) The holder of an office for the time being.

Where the instrument is payable to order, the payee must be named or otherwise indicated
therein with reasonable certainty.
Sec. 9. When payable to bearer. - The instrument is payable to bearer:

(a) When it is expressed to be so payable; or


(b) When it is payable to a person named therein or bearer; or
(c) When it is payable to the order of a fictitious or non-existing person, and such fact was
known to the person making it so payable; or
(d) When the name of the payee does not purport to be the name of any person; or
(e) When the only or last indorsement is an indorsement in blank.

Sec. 10. Terms, when sufficient. - The instrument need not follow the language of this
Act, but any terms are sufficient which clearly indicate an intention to conform to the
requirements hereof.

Sec. 11. Date, presumption as to. - Where the instrument or an acceptance or any
indorsement thereon is dated, such date is deemed prima facie to be the true date of
the making, drawing, acceptance, or indorsement, as the case may be.

Sec. 12. Ante-dated and post-dated. - The instrument is not invalid for the reason only
that it is ante-dated or post-dated, provided this is not done for an illegal or
fraudulent purpose. The person to whom an instrument so dated is delivered acquires
the title thereto as of the date of delivery.

Sec. 13. When date may be inserted. - Where an instrument expressed to be payable
at a fixed period after date is issued undated, or where the acceptance of an
instrument payable at a fixed period after sight is undated, any holder may insert
therein the true date of issue or acceptance, and the instrument shall be payable
accordingly. The insertion of a wrong date does not avoid the instrument in the hands
of a subsequent holder in due course; but as to him, the date so inserted is to be
regarded as the true date.

Sec. 14. Blanks; when may be filled. - Where the instrument is wanting in any material
particular, the person in possession thereof has a prima facie authority to complete it
by filling up the blanks therein. And a signature on a blank paper delivered by the
person making the signature in order that the paper may be converted into a
negotiable instrument operates as a prima facie authority to fill it up as such for any
amount. In order, however, that any such instrument when completed may be
enforced against any person who became a party thereto prior to its completion, it
must be filled up strictly in accordance with the authority given and within a
reasonable time. But if any such instrument, after completion, is negotiated to a
holder in due course, it is valid and effectual for all purposes in his hands, and he may
enforce it as if it had been filled up strictly in accordance with the authority given and
within a reasonable time.

Section 14 applies only to an incomplete instrument which has been delivered by the
maker or the drawer to the payee or holder.
Blanks for date, due date, name of payee, amount, or rate of interest may be filled in. It
has been held that even the blank for the name of the drawer may be filled in.
Sec. 15. Incomplete instrument not delivered. - Where an incomplete instrument has
not been delivered, it will not, if completed and negotiated without authority, be a
valid contract in the hands of any holder, as against any person whose signature was
placed thereon before delivery.

Section 15, to an incomplete instrument and undelivered;

Sec. 16. Delivery; when effectual; when presumed. - Every contract on a negotiable
instrument is incomplete and revocable until delivery of the instrument for the
purpose of giving effect thereto. As between immediate parties and as regards a
remote party other than a holder in due course, the delivery, in order to be effectual,
must be made either by or under the authority of the party making, drawing,
accepting, or indorsing, as the case may be; and, in such case, the delivery may be
shown to have been conditional, or for a special purpose only, and not for the purpose
of transferring the property in the instrument. But where the instrument is in the
hands of a holder in due course, a valid delivery thereof by all parties prior to him so
as to make them liable to him is conclusively presumed. And where the instrument is
no longer in the possession of a party whose signature appears thereon, a valid and
intentional delivery by him is presumed until the contrary is proved.

Section 16, to a complete instrument but undelivered.

Sec. 17. Construction where instrument is ambiguous. - Where the language of the
instrument is ambiguous or there are omissions therein, the following rules of
construction apply:

(a) Where the sum payable is expressed in words and also in figures and there is a
discrepancy between the two, the sum denoted by the words is the sum payable; but if
the words are ambiguous or uncertain, reference may be had to the figures to fix the
amount;
(b) Where the instrument provides for the payment of interest, without specifying the date
from which interest is to run, the interest runs from the date of the instrument, and if the
instrument is undated, from the issue thereof;
(c) Where the instrument is not dated, it will be considered to be dated as of the time it was
issued;
(d) Where there is a conflict between the written and printed provisions of the instrument,
the written provisions prevail;
(e) Where the instrument is so ambiguous that there is doubt whether it is a bill or note, the
holder may treat it as either at his election;
(f) Where a signature is so placed upon the instrument that it is not clear in what capacity
the person making the same intended to sign, he is to be deemed an indorser;
(g) Where an instrument containing the word "I promise to pay" is signed by two or more
persons, they are deemed to be jointly and severally liable thereon.

Sec. 23. Forged signature; effect of. - When a signature is forged or made without the
authority of the person whose signature it purports to be, it is wholly inoperative, and
no right to retain the instrument, or to give a discharge therefor, or to enforce
payment thereof against any party thereto, can be acquired through or under such
signature, unless the party against whom it is sought to enforce such right is
precluded from setting up the forgery or want of authority.

Sec. 30. What constitutes negotiation. - An instrument is negotiated when it is


transferred from one person to another in such manner as to constitute the transferee
the holder thereof. If payable to bearer, it is negotiated by delivery; if payable to
order, it is negotiated by the indorsement of the holder and completed by delivery.

Sec. 52. What constitutes a holder in due course. - A holder in due course is a holder
who has taken the instrument under the following conditions:

(a) That it is complete and regular upon its face;


(b) That he became the holder of it before it was overdue, and without notice that it has been
previously dishonored, if such was the fact;
(c) That he took it in good faith and for value;
(d) That at the time it was negotiated to him, he had no notice of any infirmity in the
instrument or defect in the title of the person negotiating it.

Sec. 60. Liability of maker. - The maker of a negotiable instrument, by making it,
engages that he will pay it according to its tenor, and admits the existence of the
payee and his then capacity to indorse.

Sec. 61. Liability of drawer. - The drawer by drawing the instrument admits the
existence of the payee and his then capacity to indorse; and engages that, on due
presentment, the instrument will be accepted or paid, or both, according to its tenor,
and that if it be dishonored and the necessary proceedings on dishonor be duly taken,
he will pay the amount thereof to the holder or to any subsequent indorser who may
be compelled to pay it. But the drawer may insert in the instrument an express
stipulation negativing or limiting his own liability to the holder.

Sec. 62. Liability of acceptor. - The acceptor, by accepting the instrument, engages
that he will pay it according to the tenor of his acceptance and admits:

(a) The existence of the drawer, the genuineness of his signature, and his capacity and
authority to draw the instrument; and
(b) The existence of the payee and his then capacity to indorse.

Note:

Bank would only be liable if check was accepted

Sec. 63. When a person deemed indorser. - A person placing his signature upon an
instrument otherwise than as maker, drawer, or acceptor, is deemed to be indorser
unless he clearly indicates by appropriate words his intention to be bound in some
other capacity.
Sec. 64. Liability of irregular indorser. - Where a person, not otherwise a party to an
instrument, places thereon his signature in blank before delivery, he is liable as
indorser, in accordance with the following rules:

(a) If the instrument is payable to the order of a third person, he is liable to the payee and
to all subsequent parties.
(b) If the instrument is payable to the order of the maker or drawer, or is payable to bearer,
he is liable to all parties subsequent to the maker or drawer.
(c) If he signs for the accommodation of the payee, he is liable to all parties subsequent to
the payee.

Sec. 65. Warranty where negotiation by delivery and so forth. Every person
negotiating an instrument by delivery or by a qualified indorsement warrants:

(a) That the instrument is genuine and in all respects what it purports to be;
(b) That he has a good title to it;
(c) That all prior parties had capacity to contract;
(d) That he has no knowledge of any fact which would impair the validity of the instrument
or render it valueless.

But when the negotiation is by delivery only, the warranty extends in favor of no
holder other than the immediate transferee.

The provisions of subdivision (c) of this section do not apply to a person negotiating
public or corporation securities other than bills and notes.

Sec. 66. Liability of general indorser. - Every indorser who indorses without
qualification, warrants to all subsequent holders in due course:

(a) The matters and things mentioned in subdivisions (a), (b), and (c) of the next preceding
section; and
(b) That the instrument is, at the time of his indorsement, valid and subsisting;

And, in addition, he engages that, on due presentment, it shall be accepted or paid, or both, as
the case may be, according to its tenor, and that if it be dishonored and the necessary proceedings
on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent
indorser who may be compelled to pay it.

Sec. 82. When presentment for payment is excused. - Presentment for payment is
excused:

(a) Where, after the exercise of reasonable diligence, presentment, as required by this Act,
cannot be made;
(b) Where the drawee is a fictitious person;
(c) By waiver of presentment, express or implied.

Sec. 124. Alteration of instrument; effect of. - Where a negotiable instrument is


materially altered without the assent of all parties liable thereon, it is avoided, except
as against a party who has himself made, authorized, or assented to the alteration
and subsequent indorsers.
But when an instrument has been materially altered and is in the hands of a holder in
due course not a party to the alteration, he may enforce payment thereof according
to its original tenor.

Sec. 191. Definition and meaning of terms. - In this Act, unless the contract otherwise
requires:

(a) "Acceptance" means an acceptance completed by delivery or notification;

(b) "Action" includes counterclaim and set-off;

(c) "Bank" includes any person or association of persons carrying on the business of banking,
whether incorporated or not;

(d) "Bearer" means the person in possession of a bill or note which is payable to bearer;

(e) "Bill" means bill of exchange, and "note" means negotiable promissory note;

(f) "Delivery" means transfer of possession, actual or constructive, from one person to
another;

(g) "Holder" means the payee or indorsee of a bill or note who is in possession of it, or the
bearer thereof;

(h) "Indorsement" means an indorsement completed by delivery;

(i) "Instrument" means negotiable instrument;

(j) "Issue" means the first delivery of the instrument, complete in form, to a person who
takes it as a holder;

(k) "Person" includes a body of persons, whether incorporated or not;

(l) "Value" means valuable consideration;

(m)"Written" includes printed, and "writing" includes print.

Managers Check a BOE drawn by the bank upon itself and is accepted at its issuance and
signed by a manager on behalf of a bank. These are bills of exchange drawn by the banks
manager or cashier, in the name of the bank, against the bank itself.
Since the bank issues the check in its name, with itself as the drawee, the check is deemed
accepted in advance.
The bank issues the said check in its name, with itself as the drawee, the check is deemed
accepted in advance. It constitutes its written promise to pay on demand. The bank is
liable for damages if the holder presents it for payment or acceptance and the
former denies it.
Sec. 185. Check, defined. - A check is a bill of exchange drawn on a bank payable on demand.
Except as herein otherwise provided, the provisions of this Act applicable to a bill of exchange
payable on demand apply to a check.

Accommodation Party
Is one who has signed the instrument as maker, drawer or acceptor, or indorser, without
receiving value therefore, and for the purpose of lending hi name to some other person.
The accommodation partys liability is jointly and severally.

Requisites:
1. Has signed the instrument as maker, drawer, or acceptor, or indorser;
2. Without receiving value; and
3. For the purpose of lending his name to some other person.

Bar Question (2012)

X acted as an accommodation party in signing as a maker of a promissory note. Which phrase


best completes the sentence - This means that X is liable on the instrument to any holder for
value:

Answer:
Even though the holder knew all along that X is only an accommodation party.

Bar Question (2008)


As a rule under the Negotiable Instruments Law, a subsequent party may hold a prior party liable
but not vice versa. Give two (2) instances where a prior party may hold a subsequent party liable.

Answer:
1. An accommodation party may hold the party accommodated liable to him.
2. An acceptor for honor may likewise hold the party for whose honor he accepted the bill
of exchange.

Bar Question (2005)


Dagul has a business arrangement with Facundo. The latter would lend money to another,
through Dagul, whose name would appear in the promissory note as the lender. Dagul would
then immediately indorse the note to Facundo. Is Dagul an accommodation party? Explain.

Answer:
No. In the case at bar, Dagul cannot be deemed as an accommodation party since the
facts indicate that the party supposedly accommodated (Facundo) is the one extending
the credit. The above arrangement is totally repugnant to the concept of an
accommodation party.

Accommodation Party
Not the principal party.
Bank knew principal party is the principal debtor.
Bank accepted the accommodation party, upon payment thereof, what will happen to the
liability that exists before the issuance of the check?
Bank encashed the check. It will not dissolve the instrument as well as the contract.
Payment of the accommodation party will not dissolve the contract because he is merely
an accommodation party.

Forgery is a real defense even against a holder in due course.

Material Alternation may enforce only as to its original tenor. (Drawer)

Acceptor even though there was a forgery when the same was accepted by him, he is liable
according to the manner of his acceptance.
Insurance

What is insurable interest?

Answer: An insurable interest is that interest which a person is deemed to have in the subject
matter insured, where he has a relation or connection with or concern in it, such that
the person will derive pecuniary benefit or advantage from the preservation of the
subject matter insured and will suffer pecuniary loss or damage from its destruction,
termination, or injury by the happening of the event insured against. (Violeta R. Lalican
vs. The Insular Life Assurance Company Limited, G.R. No. 183526, August 25, 2009)

Life Insurance It is sufficient that insurable interest over the life of another only exists at the
time the insurance is taken.

Property Insurance The insurable interest should exist at the time the insurance is taken and
at the time the loss occurs. The beneficiary must have insurable interest
over the property. The interest is limited to the actual value in the
propert.

Lending Investors no assurance of the risk itself.

The lending investor performs itself as an insurance company assuring the risk. Will it be
transformed into an insurance company?
No. They are prohibited from doing insurance business.
But with respect to liability, it is considered as an insurance company.

Concealment Sec. 26. A neglect to communicate that which a party knows and ought to
communicate.

Misrepresentation An oral or written statement of a fact or condition affecting the risk made
by the insured to the insurance company, tending to induce the insurer to assume the risk.

What are the usual obligations/authority of the Insurance Commissioner?


1. Authorized to suspend or revoke licenses to engage in insurance business
2. He is also empowered to issue certificates of insurance.
3. He can also entertain actions submitted before and decide on actions related to insurance.

What will happen if there is a decision by the Insurance Commissioner, to whom will
you appeal?
Question of Facts Appealable to the Court of Appeals. (You file a notice of appeal with
the Insurance Commissioner within 30 days from receipt of copy of such order, ruling or
decision.)
You must still exhaust administrative remedies. Appeal is with the Secretary of
Finance.
Question of law Supreme Court.
Transportation Law

What are common carriers?


Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.

Extraordinary Diligence common carrier


Ordinary Diligence of a Good Father of a Family private carrier

Contract to Carry is consensual and is necessarily perfected by mere consent.

Contract of Carriage should be considered as a real contract for not until the carrier is actually
used can the carrier be said to have already assumed the obligation of a carrier.
Usual evidence is the bill of lading.
Starts when the whole or any part of his body is inside the common carrier.

Confirmation of Ticket Yes. It is considered as a perfected contract of carriage.


Corporation Code

Corporation defined. A corporation is an artificial being created by operation of law, having


the right of succession and the powers, attributes and properties expressly authorized by law or
incident to its existence. (Sec. 2, BP No. 68)

Attributes of a Corporation:
The attributes of a corporation are the following: (ALS PAPI)
1. It is an Artificial being
2. It is created by operation of Law
3. It enjoys the right of Succession
4. It has the Powers, Attributes and Properties expressly authorized by law or Incident to its
existence.

Public Corporation Those created usually under a special law for political purposes connected
with the public good in the administration of the civil government. Part of the state and an agent
of the state. Separate Charter, created by the law itself.

Private Corporation those formed for some private purpose, benefit, aim or end. Usually they
are organized under a general law.

Corporations sole those that consist of one person or individual only and who are made as
bodies corporate and politic in order to give them some legal capacity and advantage which, as
natural persons, they cannot have. It is a religious corporation which consists of one member or
corporator only and his successor.

Close Corporation one which is limited to selected persons or members of the family (Sec.
96 105, CC).

Open Corporation one which is open to any person who may wish to become a stockholder
or member thereto.

When does a corporation begin to exist?


Exists from the time the corporation is given the certificate of incorporation. It is by
operation of law. Any amendment lies upon the BOD/BOT.
It is the duty of the Secretary of the board or trustees to inform the SEC of its amendment
or alteration.

What will happen in the case of a corporation sole? Is there a need to dissolve the
corporation sole and file for reincorporation so that the same could be considered as
a regular corporation?
There is no need to dissolve. A corporation sole has a separate juridical personality. It will
still be formed as a separate juridical personality by just amending the AOI and submitting
the amendment to the SEC for approval.
It is only the SEC that approves the amendment.
Amendments SEC approves it.
If dissolution it is the court which approves the dissolution of the corporation.
Government Owned and Controlled Corporation
It refers to any agency organized as a stock or non-stock corporation, vested with
functions relating to public needs whether governmental or proprietary in nature, and
owned by the Government directly or through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per
cent of its capital stock: Provided, That government owned or controlled corporations may
be further categorized by the Department of the Budget, the Civil Service Commission,
and the Commission on Audit for purposes of the exercise and discharge of their respective
powers, functions and responsibilities with respect to such corporations.
Not entirely a public corporation. Not part of the state nor is an agent of the state.
It is a private corporation being controlled by the government.

MIWD (Local Water Districts)


They are GOCCs.
Case is filed against the MIWD.
Will the determination on whether a corporation is a public or private corporation be a
prejudicial question as to the respective liability of the board of directors?
No. It will not serve as a prejudicial question. They are still laible.
General Banking Laws

Policy of the Central Bank


The State shall maintain a central monetary authority that shall function and operate as
an independent and accountable body corporate in the discharge of its mandated
responsibilities concerning money, banking and credit. In line with this policy, and
considering its unique functions and responsibilities, the central monetary authority
established under this Act, while being a government-owned corporation, shall enjoy fiscal
and administrative autonomy. (Sec. 1, RA No. 7653)
While it is a government owned corporation it enjoys fiscal and administrative autonomy.

Bangko Sentral ng Pilipinas (BSP)


It is the states central monetary authority. It is the government agency charged with the
responsibility of administering the monetary, banking and credit system of the country
and is granted the power of supervision and examination over bank and non-bank financial
institutions performing quasi-banking functions, including savings and loan associations
(Busuego v. CA, G.R. No. L-48955, June 30, 1987).

Bangko Sentral ng Pilipinas as an institution


The BSP is a government-owned corporation which enjoys fiscal and administrative
autonomy.

What are the coverage of the AMLA law?


The following are covered by the AMLA law (Covered Institutions was changed to Covered
Persons)

1. "banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops,


money changers, remittance and transfer companies and other similar entities and all
other persons and their subsidiaries and affiliates supervised or regulated by the Bangko
Sentral ng Pilipinas (BSP);

2. "insurance companies, pre-need companies and all other persons supervised or regulated
by the Insurance Commission (IC);

3. "securities dealers, brokers, salesmen, investment houses and other similar persons
managing securities or rendering services as investment agent, advisor, or consultant, (ii)
mutual funds, close-end investment companies, common trust funds, and other similar
persons, and (iii) other entities administering or otherwise dealing in currency,
commodities or financial derivatives based thereon, valuable objects, cash substitutes and
other similar monetary instruments or property supervised or regulated by the Securities
and Exchange Commission (SEC);

4. "jewelry dealers in precious metals, who, as a business, trade in precious metals, for
transactions in excess of One million pesos (P1,000,000.00);

5. "jewelry dealers in precious stones, who, as a business, trade in precious stones, for
transactions in excess of One million pesos (P1,000,000.00);
6. "company service providers which, as a business, provide any of the following services to
third parties: (i) acting as a formation agent of juridical persons; (ii) acting as (or arranging
for another person to act as) a director or corporate secretary of a company, a partner of
a partnership, or a similar position in relation to other juridical persons; (iii) providing a
registered office, business address or accommodation, correspondence or administrative
address for a company, a partnership or any other legal person or arrangement; and (iv)
acting as (or arranging for another person to act as) a nominee shareholder for another
person; and

7. "persons who provide any of the following services:

(a) managing of client money, securities or other assets;

(b) management of bank, savings or securities accounts;

(c) organization of contributions for the creation, operation or management of companies;


and

(d) creation, operation or management of juridical persons or arrangements, and buying


and selling business entities.

"Notwithstanding the foregoing, the term covered persons shall exclude lawyers and accountants
acting as independent legal professionals in relation to information concerning their clients or
where disclosure of information would compromise client confidences or the attorney-client
relationship: Provided, That these lawyers and accountants are authorized to practice in the
Philippines and shall continue to be subject to the provisions of their respective codes of conduct
and/or professional responsibility or any of its amendments."

What are the exceptions wherein one may inquire into the deposits of the individual
without violating the Secrecy on Bank Deposits?

1. In an examination to determine gross estate of a decedent.


2. In an investigation for violation of Anti-Graft and Corrupt Practices.
3. In an investigation by the Ombudsman.
4. In an impeachment proceeding (2012 Bar)

With court order:


a) In cases of unexplained wealth under Sec. 8 of the Anti-Graft and Corrupt Practices Act
(PNB v. Gancayco, L-18343, September 30, 1965)
b) In cases filed by the Ombudsman and upon the latters authority to examine and have
access to bank accounts and records (Marquez v. Desierto, GR 138569, September 11,
2003)

Without court order:


If the AMLC determines that a particular deposit or investment with any banking institution is
related to the following (HK-MADS):
a) Hijacking,
b) Kidnapping,
c) Murder,
d) Destructive Arson, and
e) Violation of the Dangerous Drugs Act.
f) Acts of Terrorism or in violation of Human Security Act.

In order that the Ombudsman may inspect a bank deposit:


1. There must be a case pending in court,
2. The account must be clearly identified,
3. The inspection must be limited to the subject matter of the pending case,
4. The inspection may cover only the account identified, and
5. The bank personnel and the account holder must be notified to be present during the
inspection (Marquez v. Desierto, G.R. No. 135882, June 27, 2001; Office of the
Ombudsman v. Ibay, G.R. No. 137538, September 3, 2001).

Foreign Currency Deposit Law. Exceptions to the General Rule.


1. AMLC may inquire into any deposit with a bank or financial institution in case of violation
of RA 9160 if there is probable cause that it is related to an unlawful activity (RA 9160,
Sec. 11)
2. With the consent of the depositor of the Foreign Currency.