Banking Board of Ecuador

RESOLUTION No. JB-2015-3472

THE BANKING BOARD

CONSIDERING:

THAT the First Transitional Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332, of September 12, 2014, states that resolutions contained in the Codification of Resolutions of the Superintendence of Banks and Insurance and of the Banking Board, and the norms issued by the control bodies, will remain in effect in all that does not oppose the Organic Monetary and Financial Code, until the Monetary and Financial Policy and Regulation Board resolves what corresponds, according to the case; and, with the second paragraph of the Third Transitional Provision, which states that the Banking Board will continue to act until it resolves all claims, appeals, and other administrative procedures that it was hearing as of the date of entry into force of the same, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT on June 3, 2014, Mr. Edwin Enoc Ortiz Troya, in his capacity as legal representative of the company CONSTRUCCIONES VIALES FLUMVILCONS S.A., filed a claim against Banco de Guayaquil S.A. at the Regional Intendancy of Banks of Guayaquil, on the grounds that, according to his indication, on April 16, 2014, he submitted a request to the customer service unit of the Paseo Shopping Branch in Quevedo of said banking entity, for the change of signatures of the holder of current account No. 000872680-9, belonging to the aforementioned company, due to a change of legal representative, replacing the signature of the former legal representative Diahann Bernarda López Cruz, under the condition of single signature; that a week later, on April 25, 2014, at the Salcedo Branch, he made the request to transfer the company's current account to that branch, as he resides in that city; that at that branch he requested verification of the status of his signature change request for the aforementioned current account, finding that as of that date, the lady Diahann López Cruz still appeared as legal representative and authorized signature; that at the Salcedo Branch they asked him to update his letter and that the problem lies in that, by not attending his request in a timely manner, the bank proceeded on April 24, 2014, to pay a check that should not have been paid due to signature non-conformity, as it was signed by the former legal representative and authorized signature of the company's current account; that on April 29, 2014, he had filed a claim with the bank regarding the incorrect procedure, for which he filled out a bank complaint form; that on May 6, 2014, upon inquiring about the status of his claim, he received no response, so he requested a copy thereof, obtaining as a response that the official to whom he made the request was not authorized to deliver what was requested; that on the same day he filed a new complaint at the Salcedo Branch explaining everything that had happened; that on May 23, 2014, he sent another letter to the bank since he had not obtained a response to his complaint within the period established in the regulations issued by the Superintendence of Banks; that the bank, on May 27, 2014, issued a negative response to his complaint, based on the fact that no notification of loss or theft of the check had been registered, referring to the

---

Resolution No. JB-2015-3472

Page No. 2

provisions of the Regulation of the General Check Law; that the bank indicated to him that the custody of checks is an obligation of the account, and that this motivation is irrelevant since none of his complaints refer to the fact that the improperly paid check was stolen, destroyed, or damaged; that the truth of the facts is that the bank paid a check that should have been returned due to a formal defect, since on April 16, 2014, he had requested a change of authorized signature and that said check was issued by the former legal representative and authorized signature of the company; and, with this background and in view that it originated in an incorrect procedure by the bank, he requested that the Superintendence of Banks order the bank to return the claimed value due to the damage caused against the company of which he is the legal representative;

THAT the grounds of the appeal are limited to the fact that on April 16, 2014, a request was submitted to Banco de Guayaquil S.A. at the Paseo Shopping Branch in Quevedo, in which he requested the change of signatures of the holder of current account No. 0008726809, belonging to the firm CONSTRUCCIONES FLUMVILCONS S.A., replacing the signature of the former representative Diahann Bernarda López Cruz; that on April 25, 2014, he requested verification of the situation of said signature change order, finding that as of that date, the aforementioned Ms. López Cruz still appeared as legal representative, despite the request having been submitted on April 16, 2014; that for this reason, on April 24, 2014, the bank improperly paid Check No. 101, in the amount of USD 15,210.00, which had been drawn by the former legal representative of the company even though 8 days had passed since his signature change request; that on April 29, 2014, he filed a complaint with the bank regarding its incorrect procedure and for this purpose filled out an internal complaint form of the bank; that the bank, on May 28, 2014, responded with the denial of his complaint, arguing that there was no notification of loss or theft of the claimed check for non-payment; that this response is irrelevant, since none of his complaints were because said check was lost, stolen, destroyed, or damaged; that the bank should have returned the check due to a formal defect, since on April 16, 2014, the change of authorized signature had already been requested; and, based on the grounds exposed, he files the appeal for review requesting that what was established by the Regional Intendant of Guayaquil through letter No. IRG-DAYEU-V-R-2014-807, of July 22, 2014, be set aside.

THAT regarding the grounds presented by the appellant, it must be considered that Article 9 of the General Check Law, in force at the time the fact questioned by the appellant occurred, provides: "When a check bears signatures of incapacitated persons, false signatures of imaginary persons, or signatures that for any other reason cannot bind the persons for whom the check was signed or with whose name the obligations of any other signatories appear signed, they will not cease to be valid for that reason."

THAT Article 10 of the aforementioned law provides that whoever signs a check as a representative of a person from whom they do not have power to act, obligates themselves personally by virtue of the check, and that, if they have paid, they have the same rights that the supposed represented person would have; and, that the norm also

---

Resolution No. JB-2015-3472

Page No. 3

provides that the same rule applies to the case of the representative who has exceeded their powers;

THAT Article 2 of the Regulation of the General Check Law, incorporated into Chapter III, Title XXIV, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and of the Banking Board, in force at the time the fact subject of the complaint occurred, defines authorized signature as the signature of the person recorded in the bank's records, previously authorized by the holder, to draw checks against the holder's current account, which in this case has happened with the signature of Ms. Diahann Bernarda López Cruz, who was authorized at the time the check was drawn, that is, April 15, 2014, as the authorized signature of the company CONSTRUCCIONES VIALES FLUMVILCONS S.A.;

THAT Mr. Edwin Enoc Ortiz Troya, who holds the status of legal representative of the company CONSTRUCCIONES VIALES FLUMVILCONS S.A., presented on April 16, 2014, the request to the bank to invalidate the authorized signature of the former legal representative of said company, Ms. Bernarda López Cruz, due to "change of legal representative"; and, that, nevertheless, the file shows that the appellant has been acting as legal representative of the mentioned company since November 18, 2013, the date he accepted his position and that the appointment of general manager was registered in the respective Commercial Registry on February 7, 2014;

THAT the second paragraph of Article 95 of the Regulation of the General Check Law, in force at the date of the event subject of the complaint presented to the control body, provides that the drawee bank is obliged to pay checks with the signatures registered at the time of drawing according to the periods provided in Articles 25 and 58 of the General Check Law; and, that in the present case, from the simple copy of the check it is observed that it was drawn on April 15, 2014, a date prior to that on which the appellant acknowledges having requested the change of authorized signature to the bank;

THAT according to the technical report presented by the Regional Intendancy of Guayaquil, the bank observed the regulatory procedure for the payment of checks;

THAT Mr. Edwin Enoc Ortiz Troya states in his complaint that on April 25, 2014, taking advantage of being at a bank branch to process a transaction on the company's account, he requested that the situation of the signature change order made to the bank on April 16, 2014, be verified, that is, after 9 days of having made the request; and, that from the information sent by the bank it appears that the registration of the new signature, which required the physical presence of the appellant, was only verified on April 28, 2014;

THAT the second paragraph of Article 5, Chapter IV, Title XX, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and of the Banking Board, which governs matters inherent to the handling of complaints, applicable to the present case, provides:

---

Resolution No. JB-2015-3472

Page No. 4

"If the situation that motivated the complaint referred to in the previous paragraph originated in an incorrect procedure of the controlled institution, which caused damage to the complainant, the Superintendence of Banks and Insurance may order the return of the claimed values, in exercise of the functions and attributes contemplated in letters b) and o) of Article 180 of the General Law of Financial System Institutions, granting the legal representative of the entity a period that may not exceed fifteen (15) days from notification to send, under the legal warnings, the proof of compliance with the order issued."

THAT in the case subject to analysis, the denial by the Regional Intendancy of Guayaquil to attend the complaint presented by Mr. Edwin Enoc Ortiz Troya was based on the fact that no violation of legal or regulatory norms by the bank has been verified at the time of paying the challenged check, so in the present case the condition required in the aforementioned norm has not been met;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0107 of February 4, 2015, recommended to the Banking Board to reject the claim contained in the appeal for review filed;

AND,

IN EXERCISE of its legal powers;

RESOLVES:

SINGLE ARTICLE.- REJECT the appeal for review filed by Mr. Edwin Enoc Ortiz Troya, General Manager of CONSTRUCCIONES VIALES FLUMVILCONS S.A., against the administrative act contained in letter No. IRG-DAYEU-V-R-2014-807, of July 22, 2014; and, consequently, RATIFY its content.

NOTIFY.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the tenth day of June of two thousand fifteen.

Econ. Rodrigo Landeta Parra GENERAL INTENDANT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the tenth day of June of two thousand fifteen.

Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD