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OFFICE OF SPECIAL INVESTIGATION

ARMANDO V. GATMAITAN,
(in behalf of Spouses Elbert and Ana
Milagros Gatmaitan)
Complainant,
-versus-

OSI-AC-No. 2012-030

For: "unfitness and questionable integrity"


MARY ANN LUZ, JOSE ANTONIO R.
LUZ, ALFREDO R. BAUTISTA, GREG
MANGAHAS, TORADIO R. ESPLANA,
RENATO L. LUBID, DIORY GAVINO,
CATHERINE SALUBRE,
Respondents.
[RURAL BANK OF LOBO, INC. - STO.
TOMAS BRANCH]
X------------------------------X

RESOLUTION

This resolves the complaint filed against respondents Mary Ann Luz
(President), Jose Antonio R. Luz (Director and Treasurer), Alfredo R. Bautista
File/ Ref. No. OSI-O-

OSI Form No. 19 * Version 2 * Updated 28 September 2012

(Director), Greg Mangahas (Vice President for Operations), Toradio R.


Esplana (Compliance Officer), Renato L. Lubid (Branch Manager), Diory
Gavino (Liaison Officer, Credit Investigator and Collector) and Catherine
Salubre (Teller and Cashier) of Rural Bank of Lobo, Inc. for unfitness and
questionable integrity in violation of pertinent banking laws.

FACTS

Mr. Armando V. Gatmaitan, on behalf of his son Elbert C. Gatmaitan


and daughter-in-law, Ana Milagros R. Artigas (the registered owners of the
property covered by TCT No. 90196) filed the instant complaint against
respondent bank officers. Basically, the complaint is based on two grounds:
1. Respondent bank officers act of granting a loan to certain
individuals who are not the real owners of a property covered by
Transfer Certificate of Title No. 90196, the property used as collateral
for the loan; and
2. Respondent bank officers alleged utter unbecoming conduct and
display of bad faith after having been informed/learned that the
documents submitted to the bank were falsified.
In gist, complainant alleges that despite the use of various falsified
documents in the application of the loan, respondent bank officers granted
and released the loan proceeds to certain individual/individuals who were
not the real owners of the property used as collateral.
In support of his allegation, complainant presented the following
alleged falsified documents submitted to the bank:
2

1. Certificate of Live Birth of Ana Milagros R. Artigas


2. Philippine Passport of Ana Milagros Gatmaitan
3. Certificate of Live Birth of Elbert C. Gatmaitan
4. Postal Identification card of Elbert C. Gatmaitan
5. Certificate of Marriage of Elbert C. Gatmaitan and Milagros R. Artigas
Likewise,

complainant

submitted

the

following

alleged

genuine

documents to buttress his stance:


1. Certificate of Live Birth of Ana Milagros R. Artigas
2. Philippine Passport of Ana Milagros Gatmaitan
3. Certificate of Live Birth of Elbert C. Gatmaitan
4. Philippine Passport of Elbert C. Gatmaitan
5. Certificate of Marriage of Elbert C. Gatmaitan and Ana Milagros R.
Artigas
6. Letter from the Office of Consular Affairs, Department of Foreign
Affairs dated 20 June 2012 stating among others that Philippine
passport number AA0175928 (the passport number appearing on the
passport used in the application of loan) yielded negative results as
confirmed by the NO AVAILABLE DATA reply from their Electronic
Data

Processing

(EDP)

Section.

It

further

states

that

No

record/information is/are available for the subject passport number/s


from the years 1990 and onward.
Based

on

the

foregoing

documents,

we

note

the

following

inconsistencies:
A. Based on the documents
submitted to the bank

B. Based on the documents


submitted by complainant

1. Certificate of Live Birth of


Ana

Milagros

R.

Artigas
3

contains,

among

others,

the following:
City

or

Municipality

City

or

Municipality

Makati City

Manila

Local Civil Registrar No.

Local

118

3410

Place of Birth Makati City

Place of Birth Manila

Name

Name

of

Hospital

or

institution at home

Civil

Registrar

of

institution

Hospital

Far

No.

or

Eastern

University Hospital
Usual residence of Mother

Usual residence of Mother

Makati City with address

Province

at

Paraaque with address at

1827

Santan

Dasmarias Village

of

Rizal,

#2 Ramon Street, Baltao


Subd.

Name

of

Child

ANA

Name

of

Child

ANA

MILAGROS ROYOL ARTIGAS

MILAGROS REYES ARTIGAS

Date of Birth December

Date of Birth June 23,

12, 1974

1965

Father Delfin Artigas

Father Antonio Carranceja


Artigas

Mothers maiden name

Mothers maiden name

Luzviminda C. Royol

Clarita Larosa Reyes

2. Certificate of Live Birth of


4

Elbert

C.

contains,

Gatmaitan

among

others,

the following:
Province Metro Manila

Province Manila

City or Municipality Pasig

City

City

Manila

Local Civil Registrar No.

Local

168

2631

Place of Birth Pasig City,

Place of Birth Manila, 667

Metro Manila

U.N. Ave.

Name

of

Hospital

or

institution at home

or

Municipality

Civil

Name

of

Registrar

Hospital

No.

or

institution Manila Doctors


Hospital

Usual Residence of Mother

Usual Residence of Mother

Pasig City, Metro Manila

Pasay City with address

with

at 364 Libertad

address

at

1230

Rosario
Name of Child ELBERT

Name of Child ELBERT

CAILAO GATMAITAN

CLAUDIO GATMAITAN

Date of Birth January 15,

Date of Birth March 21,

1978

1964

Father

Gatmaitan

Ernesto

A.

Father

Armando

V.

Gatmaitan
5

Mother

Mercedita

B.

Cailao

Mother

Concepcion

A.

Claudio

3. Certificate of Marriage of
Elbert C. Gatmaitan and
Ana Milagros R. Artigas
Province Metro Manila

Province Metro Manila

City Pasay City

City Makati City

Registry No. 99-4217

Registry No. 95-923

Date and Place of Birth:

Date and Place of Birth:

Elbert C. Gatmaitan on 15

Elbert C. Gatmaitan on 21

January 1973 Pasig City

March 1964 Manila City

Ana Milagros R. Artigas on

Ana Milagros R. Artigas on

12 December 1974 Makati

23 June 1965 Manila

Residence

Residence

Elbert

Elbert

Gatmaitan 1230 Rosario,

Gatmaitan 1827 Santan

Pasig City

Street,

Ana

Milagros

Artigas

Dasmarias

Vill.,

Makati City

1827 Santan, Dasmarias

Ana

Milagros

Artigas

Vill., Makati City

9479 Ramon Street, Airport


Village, Paraaque

Name of Father Ernesto

Name of Father Armando

A. Gatmaitan and Delfin

Gatmaitan

Artigas

Artigas

and

Antonio

Name of Mother Mercedita

Name

of

Mother

B. Cailao and Luzviminca c.

Concepcion

Royol

Clarita Reyes

Place and Date of Marriage

Place and Date of Marriage

Pasay City, 15 February

1999

Antonio

Claudio

Sanctuario
Parish,

De

and

San
Forbes

Park, Makati City, 4 March


1995

As regards complainants allegation of respondent bank officers


utter unbecoming conduct and display of bad faith after being informed
of the use of falsified documents in the loan application, complainant
asserts that respondents did not ascertain the veracity of complainants
information. Allegedly, neither did respondents review how the loan was
processed, not even an investigation was conducted to determine or
identify the bank personnel who were remiss in their duties. Complainant
contends that respondents continued to stonewall in their insistence that
the loan was legitimate. Worse, the bank has foreclosed and purchased
the real property during the public auction.
In addition, complainant submitted the following documents:
1. A copy of Special Power of Attorney executed by Spouses Elbert and
Ana Milagros Gatmaitan dated 11 April 2012 authorizing Armando
Gatmaitan to represent them before Bangko Sentral ng Pilipinas;

2. A copy of Transfer Certificate of Title No. 90196 showing that the


property was registered in the name of ANA MILAGROS R. ARTIGAS
married to ELBERT C. GATMAITAN, of legal age, Filipino, and resident
of and with postal address at No. 1827 Santan, Dasmarias Village,
Makati City;
3. A letter from Armando Gatmaitan dated 25 January 2011 addressed
to the Branch Manager of the Rural Bank of Lobo informing the latter
that Spouses Gatmaitan has not applied for any loan with the subject
rural bank;
4. A copy of the Minutes of the public auction dated 16 April 2012 held
in front of the Hall of Justice, Tanauan City, Batangas in connection
with the extrajudicial foreclosure of the said property;
5. A copy of the Final Demand Letter of Rural Bank of Lobo dated 13
November 2010 addressed to Mrs. Ana Milagros Artigas Gatmaitan
and Mr. Elbert Cailao Gatmaitan and was sent to No. 1827 Santan,
Dasmarias Village, Makati City;
6. Rural Bank of Lobos Letter addressed to Armando Gatmaitan dated
11 February 2011 stating among others that, complainant is not the
borrower of the bank and has no legal personality to write the letter
for the debtors/borrowers;
7. A copy of an electronic mail reply of respondent Mary Ann Luz dated
16 April 2011 addressed to Milette Gatmaitan copy furnished FCAGBSP;

8. A copy of the minutes of Clarificatory Meeting dated 17 June 2011


incorporating the agreement between respondent Renato Lubid and
complainant Gatmaitan as witnessed by BSPs Teresita Lisama et al.;
9. A letter from Rural Bank of Lobo dated 11 August 2011 addressed to
Armando Gatmaitan in response to the letter complaint of the latter
filed with the FCAG, BSP;
10.

A certified true copy of the certification of the Barangay dated

31 August 2011 stating among others that the Barangay Clearance


of spouses Gatmaitan as presented by the Rural Bank of Lobo is a
counterfeit;
11.

A letter from the Land Registration Authority dated 24 January

2012 addressed to Mary Ann Luz as President of the Rural Bank of


Lobo;
12.

A certification from the Office of the Building Official of Makati

City dated 15 June 2012 certifying among others that, a building


permit was issued to Armando Gatmaitan for the new construction of
a 2-storey residential building located at 1827 Santan Street,
Dasmarinas Village, Makati City; and
13.

A copy of Tax Declaration No. 38296 showing that the property

is located at Santan Street, Dasmarinas, Village, Makati, Metro


Manila.

In her sworn answer, respondent Catherine Salubre denies the


material allegations of the complaint. While she confirms that she is a
9

teller/cashier of RB Lobo Sto. Tomas Branch, she claims that her duty to
release the proceeds of the loan is purely ministerial. Also, she claims that
her participation in the loan account of spouses Gatmaitan was only in the
preparation of the check after the loan documents have been prepared,
processed and signed by various officers.
On the other hand, respondent Greg Mangahas sent an unsworn
letter stating that he resigned from the bank effective 30 March 2010.

He

admits that is a member of the credit committee but claims that he can no
longer remember the account mentioned. He is of the view that it is
neither his responsibility to ascertain the identity of the loan applicant nor
make sure that the Know your Client (KYC) rule is complied with but
rather it is the sole accountability of the Sto. Tomas Branch officers.
For his part, respondent Toradio R. Esplana denies the material
allegations of the complaint. He alleges that he did not in any way
participate in the processing, approval and release of the loan. He pointed
out that he was not yet the Compliance Officer of the bank during the
period when the loan was granted, as his employment with the bank was
only about five months or from 2 May 2011 to 31 October 2011. He claims
that his only participation in subject loan was when he wrote a letter
regarding the denial of complainants request for the cancellation of the
mortgage. He claims, too, that during his short stint, he started cleaning
the bank of potentially unsafe banking practices. He also admitted that
upon assumption as Compliance Officer, he conducted an honest to
goodness verification of the case at hand and found out that there were
two sets of titles covering the same lot but was not able to complete the
task due to his resignation in October 2011.

10

Respondent Diory D. Gavino denies the allegations hurled against


him. He claims that with respect to the loan of spouses Gatmaitan, he only
took orders from the manager - Renato L. Lubid, to have the Real Estate
Mortgage notarized, then paid the documentary stamp taxes and endorsed
the documents with the Register of Deeds for registration.
Respondent Renato L. Lubid also denies the allegations against him.
He claims that the loan was granted in good faith as documentary
requirements and procedures were properly followed.

To support his

averments, he submitted, among others, the following documents:


a. Interview Sheet for loan applicant dated 18 October 2009
b. Loan application form dated 18 October 2009
c. Owners Duplicate Copy of Transfer Certificate of Title No. T-90196
registered under the name of Ana Milagros R. Artigas married to
Elbert C. Gatmaitan
d. Copy of Tax Declaration of Real Property bearing No. 2006-00701901
e. Copy of Tax Declaration of Real Property bearing No. 007-02135
f. Real Estate Tax Receipt No. 0070486
g. Certification of Non-Delinquency for the year 2009
h. Release of Real Estate Mortgage dated 4 February 2008
i. Copy of previous Transfer Certificate of Title No. T-79023 registered
under the name of Laguna Properties Holdings, Inc.
j. Location plan
k. Certificate of Live Births of spouses Gatmaitan
l. Passport of Ana Milagros Gatmaitan
m. Postal Identification card of Elbert Gatmaitan
n. Marriage Certificate of spouses Gatmaitan
o. Barangay Clearances of spouses Gatmaitan
11

p. Community Tax Certificates of Spouses Gatmaitan


q. Billing of Meralco under the name of Delfin Artigas addressed at
1827 Santan Street, Dasmarinas Village, Makati City
r. Disclosure Statement of Ana Milagros Artigas Gatmaitan

For their part, respondents Alfredo R. Bautista, Mary Ann R. Luz and
Jose Antonio R. Luz question the authority of Armando Gatmaitan in filing
the instant complaint against them as the Special Power of Attorney
allegedly did not give the latter the authority to sue or to defend on behalf
of his son and daughter-in-law.

Nonetheless, they deny the allegations

against them.
They aver that while Armando Gatmaitan has the burden of showing
proof of falsification, however, the latter merely made assertions that the
documents were fake without presenting any concrete proof.

Thus,

respondents are of the view that there is no basis for declaring the
documents as being falsified. On the contrary, respondents contend that
the banks copy of the land title was accepted and annotated upon by the
Register of Deeds, hence, negating existence of any falsification. Further,
respondents maintain that the bank followed all procedures in granting the
loan to complainant.

In sum, respondents assert that complainants

unproven allegation of forgery against them could not be made a basis for
declaring them unfit and of questionable integrity to run the bank.
Anent the allegation of respondent bank officers utter unbecoming
conduct after being informed of the use of falsified documents in the loan
application, respondents deny bad faith or having shown any inappropriate
conduct in dealing with the complainants concern. On the contrary, they
insist that bank procedures were followed. As to the foreclosure of the
12

property during the public auction, respondents claim that the bank cannot
shirk from its duty to foreclose the property simply because the claim of
Gatmaitan is not yet proven.
RULING
We now resolve.
Before delving into the merits of the case, we will first resolve
respondents Luz and Bautistas allegation that Mr. Armando Gatmaitan is
wanting of authority to file the instant complaint in behalf of Spouses
Elbert and Milagros Gatmaitan.
We rule that the complaint has substantially complied with BSP
Circular 477, Series of 2005. It is of no moment that the Special Power of
Attorney executed by Spouses Elbert and Milagros Gatmaitan in favor of
their father-in-law, Armando Gatmaitan, did not specifically and expressly
contain the words to sue or to defend on behalf of his son and
daughter-in-law. For purposes of instituting this administrative complaint,
the following authority in favor of Armando Gatmaitan conferred in this
phrase is sufficient: to represent us in any forum necessary or called by/
for govt or private agency re- said loan It must be emphasized that the
instant case against respondent bank officers is an administrative case.
As such, it is axiomatic that in dealing with administrative cases, rules
must be liberally construed and applied. In the case of Reyes vs. Court of
Appeals et al. (G.R. No. 149580.

March 16, 2005), the Supreme Court

declared that the rules of procedure should not be strictly applied when it
would defeat the substantive rights of a party. The Supreme Court went
further by saying that rules of procedure are mere tools intended to
facilitate the attainment of justice, rather than frustrate it: A strict and
rigid application of the rules must always be eschewed when it would
subvert the primary objective of the rules, that is, to enhance fair trials
and expedite justice. Technicalities should never be used to defeat the
13

substantive rights of the other party. Every party-litigant must be afforded


the amplest opportunity for the proper and just determination of his cause,
free from the constraints of technicalities.
Let us now resolve the merits of the case.
For obvious lack of jurisdiction, we will not rule on the validity of the
contract of loan and its accompanying mortgage based on the complaint
that the transactions were entered into by impostors using spurious
documents. The jurisdiction and competence to determine the validity of a
contract and to determine the authenticity or falsity of documents
primarily belong to the civil courts.

Thus, absence any definitive ruling

from a competent court, we can only note the numerous discrepancies


pointed out by the complainant on the alleged fake documents in the
banks possession as compared to those genuine documents submitted
by complainant to this office. Bangko Sentral ng Pilipinas, as a matter of
judicial notice, does not have the competence, let alone, the expertise, to
examine, detect and make conclusions of the presence or non-existence of
falsification in documents. Especially so in this case, as complainant failed
to submit any conclusive proof, such as but not limited to, a certification
from the concerned government agency stating to the effect that these
documents (i.e. Certificate of Live Birth of Ana Milagros R. Artigas,
Certificate of Live Birth of Elbert C. Gatmaitan, Postal Identification card of
Elbert C. Gatmaitan and Certificate of Marriage of Elbert C. Gatmaitan and
Milagros R. Artigas) were not issued by them and thus, falsified. Neither
did complainant submit findings of competent authorities such as the
Philippine National Police or the National Bureau of Investigation certifying
that those documents are falsified. For these reasons, we cannot and
should not resolve the question of falsification in this case. To repeat, the
matter is best left for judicial courts to resolve.
Moreover, considering that the complaint is bereft of allegation let
alone proof that respondent bank officers participated in the commission
14

of the alleged fraudulent transaction and/or connived with the alleged


unnamed impostors (assuming arguendo that indeed impersonators
obtained the loan), our resolution will not touch such issue.
Hence, the only remaining threshold issue for consideration of this
office is:

whether respondent bank officers strictly comply with the

Know-Your-Client

(KYC) requirement in the identification of borrowers

under banking laws, rules, and regulations in the processing of subject


loan.
After a painstaking review of the totality of the evidence presented
to us, we rule that the evidence at hand show that the bank did what is
incumbent upon them to identify the borrowers in subject loan. Otherwise
stated, complainant failed to to show that respondents were remiss in the
performance of their duties at the time that the loan was processed,
approved and released.
Assuming arguendo that some, if not all of the documents,
submitted to the bank contain forgeries, we are of the opinion that at the
time those documents were presented to them, the bank can
reasonably assume that those documents were in order. This is because
the identification documents presented to the bank appear to be issued by
various government agencies. As such, on its face, the bank can rely on
the following documents as authentic:
1. Passport of Ana Milagros Artigas Gatmaitan;
2. Birth Certificate of Ana Milagros Artigas Gatmaitan;
3. Barangay Clearance of Ana Milagros Artigas Gatmaitan;
4. Postal ID of Elbert C. Gatmaitan;
5. Barangay Clearance of Elbert C. Gatmaitan;
6. Marriage Certificate of Elbert C. Gatmaitan;
7. Community Tax Certificate of Ana Milagros Artigas Gatmaitan;
8. Community Tax Certificate of Elbert C. Gatmaitan.

15

Absent any obvious reason to raise any suspicion on the authenticity


of the government-issued documents, we believe that the bank is not
under obligation to verify each of the documents with the concerned
government agencies. To impose such duty is too cumbersome to all
banking institutions and would unduly stifle the flow of commerce.
More importantly, Appendix 52e of the Manual of Regulations for
Banks (MORB) provides the following minimum requirements
1. The Basel Committee on Banking Supervision in its paper on Customer
Due Diligence for Banks published in October 2001 referred to the
intention of the Working Group on Cross-border Banking to develop
guidance on customer identification. Customer identification is an
essential element of an effective customer due diligence programme
which banks need to put in place to guard against reputational,
operational, legal and concentration risks. It is also necessary in order to
comply with anti-money laundering legal requirements and a prerequisite
for the identification of bank accounts related to terrorism.
2. What follows is account opening and customer identification
guidelines and a general guide to good practice based on the principles
of the Basel Committees Customer Due Diligence for Banks paper. This
document, which has been developed by the Working Group on Crossborder Banking, does not cover every eventuality, but instead focuses on
some of the mechanisms that banks can use in developing an effective
customer identification programme.

3. These guidelines represent a starting point for supervisors and banks in


the area of customer identification. This document does not address the
other elements of the Customer Due Diligence for Banks paper, such as
the ongoing monitoring of accounts. However, these elements should be
16

considered in the development of effective customer due diligence, antimoney laundering and combating the financing of terrorism procedures.

4. These guidelines may be adapted for use by national supervisors who


are seeking to develop or enhance customer identification programmes.
However, supervisors should recognize that any customer identification
programme should reflect the different types of customers (individual vs.
institution) and the different levels of risk resulting from a customers
relationship with a bank. Higher risk transactions and relationships, such
as those with politically exposed persons or organizations, will clearly
require greater scrutiny than lower risk transactions and accounts.

5. Guidelines and best practices created by national supervisors should


also reflect the various types of transactions that are most prevalent in
the national banking system. For example, non-face-to-face opening of
accounts may be more prevalent in one country than another. For this
reason the customer identification procedures may differ between
countries.

6. Some identification documents are more vulnerable to fraud than


others. For those that are most susceptible to fraud, or where there is
uncertainty concerning the validity of the document(s) presented, the
bank should verify the information provided by the customer through
additional inquiries or other sources of information.
7. Customer identification documents should be retained for at least five
(5) years after an account is closed. All financial transaction records
17

should be retained for at least five (5) years after the transaction has
taken place.

8. These guidelines are divided into two (2) sections covering different
aspects of customer identification. Section A describes what types of
information should be collected and verified for natural persons seeking to
open accounts or perform transactions. Section B describes what types of
information should be collected and verified for institutions and is in two
(2) parts, the first relating to corporate vehicles and the second to other
types of institutions.

9. All the terms used in these guidelines have the same meaning as in the
Customer Due Diligence for Banks paper.
Section A. Natural Persons
10. For natural persons the following information should be obtained,
where applicable:
legal name and any other names used (such as maiden name);
correct permanent address (the full address should be obtained; a Post
Office box number is not sufficient);
telephone number, fax number, and e-mail address;
date and place of birth;
nationality;
occupation, public position held and/or name of employer;
an

official

person

identification

number

or

other

unique

identifier contained in an unexpired official document (e.g.,


18

passport, identification card, residence permit, social security


records, driving license) that bears a photograph of the customer;
type of account and nature of the banking relationship;
signature.
11. The bank should verify this information by at least one of the
following methods:
confirming the date of birth from an official document (e.g.,
birth certificate, passport, identity card, social security records);
confirming the permanent address (e.g., utility bill, tax
assessment, bank statement, a letter from a public authority);
contacting the customer by telephone, by letter or by e-mail to confirm
the information supplied after an account has been opened (e.g., a
disconnected phone, returned mail, or incorrect e-mail address should
warrant further investigation);
confirming the validity of the official documentation provided through
certification by an authorized person (e.g., embassy official, notary
public).
12. The examples quoted above are not the only possibilities. In particular
jurisdictions there may be other documents of an equivalent nature which
may be produced as satisfactory evidence of customers identity.
13. FIs should apply equally effective customer identification procedures
for nonface- to-face customers as for those available for interview.

19

14. From the information provided in paragraph 10, FIs should be able to
make an initial assessment of a customers risk profile. Particular attention
needs to be focused on those customers identified thereby as having a
higher risk profile and additional inquiries made or information obtained in
respect of those customers to include the following:
evidence of an individuals permanent address sought through a credit
reference agency search, or through independent verification by home
visits;
personal reference (i.e., by an existing customer of the same institution);
prior bank reference and contact with the bank regarding the customer;
source of wealth; and
verification of employment, public position held (where appropriate).
15. For one-off or occasional transactions where the amount of the
transaction or series of linked transactions does not exceed an established
minimum monetary value, it might be sufficient to require and record only
name and address.
16. It is important that the customer acceptance policy is not so restrictive
that it results in a denial of access by the general public to banking
services, especially for people who are financially or socially
disadvantaged.
In the instant case, we believe that the bank has followed the
foregoing guidelines. Records reveal that the bank required the borrowers
20

to submit identification documents bearing their photographs such as


passports and postal ID. As prescribed by the guidelines, the bank
confirmed the permanent address of the borrowers through a Meralco
utility bill bearing the address of Spouses Gatmaitan at 1827 Santan St.,
Dasmarinas Village, Makati City. The complainant himself confirmed this
address through documents submitted by him: Copy of Tax Declaration
and Certification from the Office of Building Official of Makati.
Moreover, several demand letters via registered mail were sent to
the foregoing address when the loan became past due. Complainant
himself submitted a copy of the final demand letter of the bank dated 13
November 2010 addressed to Mrs. Ana Milagros Artigas Gatmaitan and
Mr. Elbert Cailao Gatmaitan sent to No. 1827 Santan St., Dasmarinas
Village, Makati City. Thus, complainant cannot deny that he received the
communications from the bank and it clearly shows that the bank never
concealed this loan from them. Thus, we find it highly unusual that
Spouses Gatmaitan never questioned the authenticity of the loan at the
earliest opportunity available to them i.e., when they received the first
demand letter and belatedly brought to the fore the issue of forgery only
after the loan was about to be foreclosed.
Moreover, what perturbs our mind and make us wonder (TCT) is why
was the original owners copy of the Transfer Certificate of Title of subject
lot - which paved the way for the consolidation of the title under the name
of the bank, was in the possession of the bank if indeed these borrowers
were impostors. The complainant is silent on this point and never offer
and does not offer any valid explanation e.g., that the title was missing,
lost or stolen from Spouses Gatmaitan. Be that as it may, we take judicial
notice of the fact that, as a matter of procedure, the Registry of Deeds
would necessarily require the presentation of the original owners copy of
the TCT prior to allowing any transfer of the title to another person or
21

entity. And as claimed by complainant himself, the subject property is now


registered under the name of the bank thereby confirming that the bank
was able to present the original TCT to the Registry of Deeds.
Anent the allegation of respondents utter unbecoming conduct
after being informed of the falsified documents, it appears from the records
that the bank conducted some inquiry on the veracity of the documents. In
fact, complainant himself submitted to this office a Certified True Copy of
the Record of the Barangay dated 31 August 2011.

The certification,

states among others, that a certain Ernesto Dangan and Dolores Dangan
(driver/employee of Rural Bank of Lobo) appeared before the barangay
officials to verify the authenticity of a Barangay Clearance presented to the
bank by the borrowers under the name of Spouses Elbert and Ana Milagros
Gatmaitan.
As to the allegation that respondents did not review or conduct an
investigation of the identify the bank personnel who were allegedly remiss
in their duties, records reveal that the bank acted on the complaint and
sought from complainant some pertinent documents necessary for
investigation. While the result of the banks action does not meet
complainants satisfaction, it does not mean that the bank ignored his
request for inquiry.
As to the allegation that the bank has foreclosed and purchased the
lot during the public auction despite complainants complaint, we believe
that the bank has the right to protect its interest by exercising its legal
option under the circumstances considering that it parted money to the
borrowers using subject lot as collateral.

Records are clear that

complainant has yet to prove his cause of action in a proper forum and no

22

restraining order was issued by competent court against the bank to enjoin
the foreclosure.
IN VIEW OF THE FOREGOING, it is respectfully recommended that
the administrative complaint against respondents be DISMISSED.
SO ORDERED.
Manila, 18 April 2013.

EMERSON G. ROJAS
Legal Officer III

Recommending Approval:

JOSE R. FAJARDO
Deputy Director

Approved By:

ALFONSO C. PENACO IV
Director

23

Copy Furnished:

ARMANDO V. GATMAITAN
(Complainant)
25 Milkway, Blue Ridge,
1109 Quezon City
Atty. Wilfredo Avila
(Counsel for respondents
Mary Ann Luz and Antonio R. Luz)
4-C Magalang Street, Diliman,
Quezon City
MARY ANN LUZ
(Respondent)
c/o Rural Bank of Lobo, Inc.
Lipa City Branch,
P. Torres corner G.A. Solis streets
Lipa City, Batangas
ANTONIO R. LUZ
(Respondent)
c/o Rural Bank of Lobo, Inc.
LIpa City Branch,
P. Torres corner G.A. Solis streets
Lipa City, Batangas
ALFREDO R. BAUTISTA
(Respondent)
c/o Rural Bank of Lobo, Inc.

24

Lipa City,
Batangas
RENATO L. LUBID
(Respondent)
c/o Rural Bank of Lobo, Inc.
Sto. Tomas Branch
Gen. Malvar Street, Sto. Tomas
Batangas
DIORY GAVINO
(Respondent)
c/o Rural Bank of Lobo, Inc.
Sto. Tomas Branch
Gen. Malvar Street, Sto. Tomas
Batangas
CATHERINE SALUBRE
(Respondent)
c/o Rural Bank of Lobo, Inc.
Sto. Tomas Branch
Gen. Malvar Street, Sto. Tomas
Batangas
TORADIO R. ESPLANA
(Respondent)
24 Rizal Street,
Pagsanjan,
Laguna
GREG MANGAHAS
(Respondent)
Planters Bank

25

Calamba Branch,
Laguna

26