Central Bank vs. Morfe, G.R. No. 20119, June 30, 1967

Central Bank vs. Morfe, G.R. No. 20119, June 30, 1967

Nature:This is an original action for certiorari, prohibition and injunction, with preliminary injunction, against an order of the Court of First Instance of Manila.

Keywords:unreasonable search and seizure. Requisites for a valid search warrant.

Facts:First Mutual Savings and Loan Organization encourage savings among its members and extend financial assistance thru loans. Central bank said that the Organization and others with similar nature are banking institutions and that the Org have never been authorized. Central Bank applied for asearch warrant because of the Org’s illegal receipt of deposits of money for deposit, disbursements…without compliance with Sec 2 of the General Banking Act, RA 337. The search warrant includes articles such as book of original entry…and others. (SEE NOTES)

Upon the filing of said application, on May 18, 1962, Hon. Roman Cancino, as Judge of the said municipal court, issued the warrant above referred to, commanding the search of the aforesaid premises at No. 2745 Rizal Avenue, Manila, and the seizure of the foregoing articles, there being "good and sufficient reasons to believe" upon examination, under oath, of a detective of the Manila Police Department and said intelligence officer of the Bank — that the Organization has under its control, in the address given, the aforementioned articles, which are the subject of the offense adverted to above or intended to be used as means for the commission of said offense.

The organization commenced Civil Case No. 50409 before the CFI Manila an original action for "certiorari, prohibition, with writ of preliminary injunction and/or writ of preliminary mandatory injunction," against said municipal court, the Sheriff of Manila, the Manila Police Department, and the Bank, to annul the aforementioned search warrant, upon the ground that, in issuing the same, the municipalcourt had acted with grave abuse of discretion, without jurisdiction and/or in excess of jurisdiction. Theyassailed that the search warrant is general in its terms and that the use of the word “and others” permits the unreasonable search and seizure of documents which have no relation to any specific criminal act.

Issues: W/Nthe issuance of the search warrant violates the constitutional provision in issuing a valid search warrant

Ratio: NO.

Ruling:Again, the aforementioned order would seem to assume that an illegal banking transaction, of the kind contemplated in the contested action of the officers of the Bank, must always connote the existence of a "victim." If this term is used to denote a party whose interests have been actually injured, then the assumption is not necessarily justified. The law requiring compliance with certain requirements before anybody can engage in banking obviously seeks to protect the public against actual, as well as potential, injury. Similarly, we are not aware of any rule limiting the use of warrants to papers or effects which cannot be secured otherwise.

The line of reasoning of respondent Judge might, perhaps, be justified if the acts imputed to the Organization consisted of isolated transactions, distinct and different from the type of business in which it is generally engaged. In such case, it may be necessary to specify or identify the parties involved in said isolated transactions, so that the search and seizure be limited to the records pertinent thereto. Such, however, is not the situation confronting us. The records suggest clearly that the transactions objected to by the Bank constitute the general pattern of the business of the Organization. Indeed, the main purpose thereof, according to its By-laws, is "to extend financial assistance, in the form of loans, to its members," with funds deposited by them.

Notes:

These are enumerated on the application for the search warrant mentioned:

I. BOOKS OF ORIGINAL ENTRY

(1) General Journal

(2) Columnar Journal or Cash Book

(a) Cash Receipts Journal or Cash Receipt Book

(b) Cash Disbursements Journal or Cash Disbursement Book

II. BOOKS OF FINAL ENTRY

(1) General Ledger

(2) Individual Deposits and Loans Ledgers

(3) Other Subsidiary Ledgers

III. OTHER ACCOUNTING RECORDS

(1) Application for Membership

(2) Signature Card

(3) Deposit Slip

(4) Passbook Slip

(5) Withdrawal Slip

(6) Tellers Daily Deposit Report

(7) Application for Loan Credit Statement

(8) Credit Report

(9) Solicitor's Report

(10) Promissory Note

(11) I n d o r s e m e n t

(12) Co-makers' Statements

(13) Chattel Mortgage Contracts

(14) Real Estate Mortgage Contracts

(15) Trial Balance

(16) Minutes Book — Board of Directors

IV. FINANCIAL STATEMENTS

(1) Income and Expenses Statements

(2) Balance Sheet or Statement of Assets and Liabilities

V. OTHERS

(1) Articles of Incorporation

(2) By-Laws

(3) Prospectus, Brochures Etc.

(4) And other documents and articles which are being used or intended to be used in unauthorized banking activities and operations contrary to law.