Banking Board Resolution JB-2015-3440

BANKING BOARD OF ECUADOR

RESOLUTION No. JB-2015-3440

THE BANKING BOARD

CONSIDERING:

THAT according to the last paragraph of the Second Transitory Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332, of September 12, 2014, the Banking Board will continue to act until it resolves all appeals it was hearing on the date this Code took effect, for a period of one hundred and eighty days;

THAT by Resolution No. 054-2015-F, of March 5, 2015, published in the Official Register No. 467, of March 27, 2015, the aforementioned period was extended by an additional one hundred and eighty days;

THAT by communication received at the Superintendency on March 14, 2014, Mr. Segundo Efrén Cedeño Angulo, filed an administrative complaint against Banco del Austro S.A., in the following terms:

"In June 2003, abusively and illegally, Banco del Austro initiated an executive lawsuit against me for debt in the Third Civil Court of the city and province of Esmeraldas, without having delivered any money or the vehicle that was the subject of the transaction to which the parties obligated themselves. More than ten years have passed in that discredited action against me, damaging my entire image in the financial and credit registry at the risk central and credit bureaus. - After the lawsuit reached its end where the judgment in my favor became final, the aforementioned financial institution has not executed the respective action to lift all restrictions and damages caused to my person in the national private financial system, to corroborate the aforementioned regarding the initiation and conclusion of the lawsuit I am attaching the pertinent documents of first and second instance judgments as well as the pertinent reason for the finality of the case

(...)

For the foregoing, Superintendent, I request your intervention and good offices in accordance with the Law, in order to free myself from all acts outside the order to which I was unjustly subjected in the country's financial system, in order to restore my name and my ability to operate in it without inconvenience";

THAT by letter No. DNAE-SAU-2014-02618, of April 25, 2014, the Deputy Director of User Attention, requested the aforementioned financial institution for substantiated and documented information with respective physical backing regarding the aforementioned complaint; and, by letter No. DNAE-SAU-2014-02619, of the same date, informed the claimant about the matter;

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THAT through letter No. JSC-R-2014-0309, of May 9, 2014, Mr. Paúl Córdova, Regional Manager Quito of Banco del Austro S.A., provided a response to the letter from the control body, and attached several documents related to the complaint;

THAT by letter No. DNAE-SAU-2014-03337, of May 28, 2014, the Acting Deputy Director of User Attention, resolved the complaint in question, in the following terms:

"(...)

...this control body determines that the complaint of Mr. Segundo Efrén Cedeño Angulo is well-founded because the statute of limitations has operated, which, having been declared judicially, has become final due to not being appealed; in which case its execution corresponds, that is, that the credit behavior information reflects what was dictated by the ordinary justice, that is, that the obligation has been extinguished by the prescription of the action.

In virtue of the above, the financial institution must rectify the information in the Risk Central, and send it to the National Directorate of Studies and Information of this Superintendency of Banks and Insurance, through the corresponding structures.

(...)";

THAT by communication received at the Superintendency on June 3, 2014, the Judicial Attorney of Banco del Austro S.A. filed an appeal for reconsideration against the administrative act contained in letter No. DNAE-SAU-2014-03337, of May 28, 2014, which was rejected by letter No. DNAE-SAU-2014-05364, of August 25 of the current year, in which the Deputy Director of User Attention confirmed the appealed administrative act;

THAT by writing received at the Superintendency on September 2, 2014, Dr. Wladimir Galarza León, Judicial Attorney of Banco del Austro S.A., with the professional sponsorship of lawyers Byron Salas López and Karina Artieda Salazar, filed an appeal for review against letter No. DNAE-SAU-2014-05364, of August 25, 2014;

THAT the argument of Dr. Ferdinand Galarza León, Judicial Attorney of Banco del Austro S.A., to file the appeal for review against letter No. DNAE-SAU-2014-05364, of August 25, 2014, is based on the fact that the judgments issued by the Third Judge of Civil and Commercial Matters of Esmeraldas, as well as the one issued by the Single Chamber of the Provincial Court of Justice of Esmeraldas, declared only the prescription of the executive action, but not of the obligation, within Executive Lawsuit No. docketed 08303-2003-0193, which followed the aforementioned financial entity, against the gentlemen SEGUNDO EFRÉN CEDEÑO ANGULO, WILSON RAFAEL MERCADO ANGULO, FRANKLIN

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DAVID MERCADO ANGULO AND GUILLERMO ERNESTO MERCADO ANGULO, and which was processed in the Third Court of Civil and Commercial Matters of Esmeraldas;

THAT once the study of the judgment issued on December 23, 2010, by Dr. Ángel Moisés Pereira, Judge of the Third Civil and Commercial Court of Esmeraldas, was carried out, it is observed that in the THIRD CONSIDERING of the same, it says:

"The defendants, upon answering the lawsuit, present exceptions among others the prescription of the action and lack of cause of the defendant to that effect the lawsuit was filed on June 2, 2003 and the last publication in the press was carried out on November 5, 2010, consequently in accordance with Art. 2414 of the Civil Code, it states that prescription extinguishes actions and rights of others and requires only a certain period of time during which said actions have not been exercised, time is counted from when the obligation became due; Art. 2415 ibidem expresses that the time is generally 5 years for executive actions and 10 for ordinary ones, consequently in the present case from when the obligation became due, that is, from when the lawsuit was filed until the last citation by press, more than 5 years have passed so the prescription of the action proceeds";

THAT in the dispositive part of said judgment, the Judge orders:

"For the above and without being necessary other considerations.- ADMINISTERING JUSTICE IN THE NAME OF THE SOVEREIGN PEOPLE OF ECUADOR AND BY AUTHORITY OF THE CONSTITUTION AND THE LAWS OF THE REPUBLIC. - Accepting the exception of prescription of the action, the lawsuit is declared without merit without costs or fees to regulate";

THAT from the judgment issued on October 17, 2013, by the Single Chamber of the Provincial Court of Justice of Esmeraldas, it is observed that in the SEVENTH CONSIDERING of the same, it says:

"Art. 2414 of the Civil Code, provides that prescription extinguishes actions and rights of others and requires only a certain period of time during which said actions have not been exercised, time is counted from when the obligation became due; Art. 2415 ibidem expresses that the time is generally 5 years for executive actions and 10 for ordinary ones, consequently in the present case from when the obligation became due, that is, from when the lawsuit was filed until the last citation by press, more than 5 years have passed, so the prescription of the action proceeds";

THAT in the dispositive part of said judgment, the Chamber orders:

*"For the above, ADMINISTERING JUSTICE IN THE NAME OF THE SOVEREIGN PEOPLE OF ECUADOR AND BY AUTHORITY OF THE

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CONSTITUTION AND THE LAWS OF THE REPUBLIC. - The appeal is rejected accepting the exception of prescription of the action, with costs and fees to regulate. - Notify";

THAT by order issued on October 30, 2013, the Single Chamber of the Provincial Court of Justice of Esmeraldas, attending the request made by Mr. Segundo Efrén Cedeño Angulo, expands the judgment, "in the sense that as a consequence of the declaration of prescription of the action, the cancellation of the precautionary measures ordered in the present cause is ordered...";

THAT as can be appreciated both from the judgment issued on December 23, 2010, by Dr. Ángel Moisés Pereira, Judge of the Third Civil and Commercial Court of Esmeraldas, and from the judgment issued on October 17, 2013, by the Single Chamber of the Provincial Court of Justice of Esmeraldas and its expansion dictated in the order of October 30 of that same year, it is not established that ordinary justice has declared the prescription of the obligation, since the defendants never raised this exception;

THAT in the present case, the obligation contained in the executive title that gave rise to Executive Lawsuit No. 08303-2003-0193, which followed Banco del Austro S.A., against the gentlemen SEGUNDO EFRÉN CEDEÑO ANGULO, WILSON RAFAEL MERCADO ANGULO, FRANKLIN DAVID MERCADO ANGULO AND GUILLERMO ERNESTO MERCADO ANGULO, and which was processed in the Third Court of Civil and Commercial Matters of Esmeraldas, constitutes a credit right in favor of said financial entity. On the subject, the Civil Code in its article 2392, which is transcribed below, when regulating prescription, refers not only to actions, but also to rights of others:

"Art. 2392.- Prescription is a way to acquire things of others, or to extinguish actions and rights of others, by having possessed the things, or not having exercised said actions and rights, during a certain time, and meeting the other legal requirements.

An action or right is said to prescribe when it is extinguished by prescription.";

THAT in the present case, ordinary justice has declared prescribed "the action" and not the right (obligation), since said prescription was never alleged by the defendants;

THAT therefore, this collegiate body shares the criterion of the Judicial Attorney of the control body, contained in memorandum No. PJ-2014-845, of October 31, 2014, whose pertinent part is transcribed below:

"(...)

*In the case that the prescription of the right (obligation) had been alleged, which has not happened, it corresponded to the judge to declare

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extinguished the right (obligation), which has also not occurred, because said allegation was not raised before the Court, and therefore it could not pronounce itself in accordance with what is provided in Art. 2393 of the Civil Code, which says: "He who wishes to take advantage of prescription must allege it. The judge cannot declare it ex officio", in such a way that neither the Judge of the Third Civil and Commercial Court of Esmeraldas, nor the Single Chamber of the Provincial Court of Justice of Esmeraldas, could declare the prescription of the right (obligation) ex officio.*

*...It is evident then, that the prescription of the action declared in the present case, has not extinguished the obligation contracted by the gentlemen SEGUNDO EFRÉN CEDEÑO ANGULO, WILSON RAFAEL MERCADO ANGULO, FRANKLIN DAVID MERCADO ANGULO AND GUILLERMO ERNESTO MERCADO ANGULO in favor of Banco del Austro S.A., and in no way, the prescription of the action can make the obligation unenforceable, as affirmed by the Deputy Director of User Attention in memorandum No. DNAE-SAU-2014-01171, for the expressly provided in Art. 2415 of the Civil Code, which says:

"Art. 2415.- This time is, in general, five years for executive actions and ten for ordinary ones.

The executive action becomes ordinary by the lapse of five years; and converted into ordinary, it will last only another five"

That is, that once the executive action has prescribed, the ordinary action is available, and what has been declared in the species is only the prescription of the executive action and not of the ordinary one, apart from the fact that the prescription of the right or of the obligation has not been declared as stated above.

For this reason, the allegation of Banco del Austro is perfectly valid: "IT IS THE EXECUTIVE ACTION THAT PRESCRIBED, NOT THE RIGHT OF BANCO DEL AUSTRO S.A. AS CREDITOR TO COLLECT THE OBLIGATION BY ANOTHER PATH SUCH AS THE ORDINARY".

(...)";

THAT the National Legal Intendency, through memorandum INJ-DNJ-SAL-2014-1033 of December 18, 2014, recommended to the Banking Board to accept the claim contained in the appeal for review filed;

AND IN exercise of its legal powers,

RESOLVES:

SINGLE ARTICLE.- ACCEPT the claim contained in the appeal for review presented by Dr. Wladimir Galarza León, Judicial Attorney of Banco del Austro S.A., and consequently LEAVE WITHOUT EFFECT the administrative act

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administrative act contained in letter No. DNAE-SAU-2014-05364, of August 25, 2014, with which the Deputy Director of User Attention confirmed the administrative act contained in letter No. DNAE-SAU-2014-03337, of May 28, 2014.

NOTIFY.- Given at the Superintendency of Banks, in Quito, Metropolitan District, on the twenty-seventh of May of two thousand fifteen.

(Signature) Econ. Rodrigo Landeta Parra GENERAL INTENDENT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the twenty-seventh of May of two thousand fifteen.

(Signature) Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD