VIRGINIA JUDY DY and GABRIEL DY, Petitioners, vs. PHILIPPINE BANKING CORPORATION,1 Respondent. DECISION CARPIO, J.
: Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailin the !! "ul# !$$4 De%ision ! and the &' (e)ruar# !$$5 Resolution* of the Court of +ppeals ,C+- in C+./.R. C0 No. 5'**&. 1he C+ affir2ed with 2odifi%ation the &4 "ul# &33' De%ision 4 of the Re ional 1rial Court ,R1C- of Pasi Cit#, Bran%h &54, in Civil Case No. 545'!, an a%tion for su2 of 2one# filed )# respondent Philippine Ban6in Corporation ,Phil)an6a ainst petitioners 0ir inia "ud# D# ,D#-, /a)riel D#, 5 7arina International 7ar6etin Corporation ,7arina-, Cae8ar 1an9ut%o ,1an9ut%o-, ."oel +lindo an ,+lindo an-, Efren 7er%ado ,7er%ado-, and Inter%ontinental Car o Spe%ialists, In%. 1he (a%ts So2eti2e in &343, Phil)an6:s Internal +uditin Depart2ent %ondu%ted a verifi%ation and audit of 7arina:s a%%ounts with the for2er:s Balintawa6, ;ue8on Cit# )ran%h.5 1he audit tea2 dis%overed that there were <fraudulent 2anipulations and falsifi%ation of %o22er%ial do%u2ents involvin , a2on others, )an6 drafts, invoi%es, )ills of ladin , pa%6in list, %ertifi%ates of ori in, 2edi%al and =uarantine %learan%es and other related do%u2ents resultin in loss to the )an6 of the a2ount of >S?&,5*4,$34.43< in 7arina:s e@port a%%ounts with the )an6.' On !! Septe2)er &343, Phil)an6 filed a %o2plaint for a su2 of 2one# with preli2inar# atta%h2ent a ainst 7arina, 1an9ut%o, and +lindo an. 1he %o2plaint was later a2ended to in%lude the D# spouses and 7er%ado as defendants.4 1he investi ation had revealed that in "une &343, 1an9ut%o and +lindo an ne otiated with Phil)an6 the followin e@port shippin do%u2entsA Date Ne otiation "une ', &343 "une ', &343 of Referen%e No. EBB+B &4$.43 EBB+B &4&.43 +2ount >S? &&5,544.&4 >S? &&4,$&!.!5
$34.43 EBB+B &43. &343 "une &5.43 EBB+B &5&.43 EBB+B &55.4$ >S? 35. 43
Phil)an6 found that its )an6 offi%ers.353.'&'.43 EBB+B &55. &343 "une !4.'5 >S?&. &343 "une &5.&$4.<3 It further alle ed that D# and 7er%ado %olluded with 1an9ut%o and +lindo an in the s%he2e to defraud the )an6.**3. &343 "une !*.43 EBB+B &5$.5*4. 1an9ut%o and +lindo an %ould not produ%e the2.&5 >S? &&$.54 >S? 35. authori8ed the ne otiation of the a)ove2entioned shippin do%u2ents despite these )ein 2ar6ed as <non.*' >S? 3&. D# and 7er%ado.43 EBB+B &45.43 EBB+B &45.ne otia)le. Chen Phil)an6 de2anded the surrender of the ne otia)le )ills of ladin .'3$. in fa%t.< in order to o)tain rei2)urse2ent for the fa%e value of the do%u2ents.$5 >S? 33.$' >S? &$&.&$ It was later found that there was."une 3. &343 "une !*. &343 "une &5. no
.54 >S? &$5.!$!. &343 "une !4.43 EBB+B &5*.4! >S? 3*. &343 "une &5.43
>S? &&5.43 EBB+B &44. with the %orrespondin sta2p <2er%handise loaded on )oard.4**.4&5. &343 1O1+B
EBB+B &44.4' >S? &$5. &343 "une &5.43 EBB+B &5!.$4&. &343 "une !!.3$ >S? 3!.33'.&5'.&4 >S? &$4.43 EBB+B &4'.&&'. &343 "une !*.43 EBB+B &5'. &343 "une !4.'! >S? 3&.555.
&4 She alle ed that.&& 7arina. D# denied that she %onspired with 1an9ut%o and +lindo an to defraud Phil)an6. 1he# alle ed that. whi%h was not #et due at the ti2e of the filin of the %ase )efore the R1C. it was )# wa# of a loan. honestl# )elievin that the latter were a%tin under the authorit# iven to the2 )# the )an6. also denied an# lia)ilit#. fraudulent.&5 7er%ado. the R1C rendered 9ud 2ent. for his part. &5 She stated that she was never aware of an# false pretenses %o22itted )# 1an9ut%o and +lindo an and that she never authori8ed the pur%hase of the alle ed fraudulent do%u2ents. and +lindo an denied an# lia)ilit#. the# averred. while she had eneral supervision of +rea II D whi%h in%ludes the Balintawa6 )ran%h D her parti%ipation in ever# transa%tion was not indispensa)le. and pre9udi%ial to it.<&4 7er%ado also narrated that it was D# who )rou ht 7arina in as Phil)an6:s %lient when she 9oined the )an6 on &5 "anuar# &343 sin%e it was one of her %lients in the )an6 where she was previousl# e2plo#ed. defendant 0ir inia "ud# D#.&* On the other hand.< &' Ee averred that the su)9e%t transa%tions were <%onsidered at the instan%e of and approved )# defendant 0ir inia "ud# D# who is the +ssistant 0i%e.2er%handise to )e shipped and the do%u2ents presented to the )an6 were fi%titious and fraudulent. D# and 7er%ado %ould still )e held lia)le for the )an6:s loss )e%ause the# a%ted in e@%ess of their authorit# sin%e the# approved the transa%tion without the approval )# the Board of Dire%tors and %ontrar# to )an6 pra%ti%e and pro%edure. alle in that all the transa%tions were <handled in a%%ordan%e with standard operatin pro%edures and were referred to and dul# approved )# his i22ediate superior.&! 1he# further alle ed that the )an6 was )ound )# its offi%ers: a%tions and %ould not )elatedl# repudiate su%h a%tions )# %lai2in that these transa%tions were irre ular.&3 1he Rulin of the R1C In a De%ision dated &4 "ul# &33'. and se%ured )# the %orporate earnin s of 7arina. an# lia)ilit# should )e )orne )# 7arina alone. 1an9ut%o. 1he# %lai2ed to have transa%ted with Phil)an6:s offi%ers in ood faith. Phil)an6 also alle ed that D# and 7er%ado allowed the outri ht pur%hase of said do%u2ents 6nowin the2 to )e fi%titious and fraudulent. and under whose 9urisdi%tion. It also ar ued that even assu2in the do%u2ents were enuine. dire%tion and supervision defendant wor6s as )ran%h 2ana er. assu2in the# re%eived said a2ount fro2 the )an6.President and +rea Eead of plaintiff )an6. the dispositive portion of whi%h statesA
. If at all.
$43. is lia)le for the return of the a2ounts paid.%ost of suit.to pa# the plaintiff the su2 of >S?&. +lindo an.!* . 1he Rulin of the C+ Phil)an6 appealed the R1C de%ision to the C+. !$ 1he R1C held that sin%e the )an6 %ould not o)tain rei2)urse2ents due to 7arina:s failure to surrender the ne otia)le shippin do%u2ents. HandI 7er%ado.appellees Cae8ar 1an9ut%o. are here)# DIS7ISSED. "oel +lindo an. <an o)li ation on the part of 7arina then %learl# arose and Phil)an6:s ri ht to sue to re%over the said a2ount was undenia)le. defendant 7arina is held solel# lia)le to the plaintiff and is here)# ordered to pa# the plaintiff the followin A a. the C+ affir2ed with 2odifi%ation the R1C de%ision. Spouses "ud# D# and /a)riel D#. we here)# +((IR7 the lower %ourt:s de%ision with the 7ODI(IC+1ION that the defendants. and %onse=uentl#. pre2ises %onsidered. +lindo an.<!! 1hus.$$F ). +lindo an. to ether with their respe%tive %ounter%lai2s and the %ross%lai2 a ainst 7arina. and +lindo an lia)le for the a2ounts that Phil)an6 paid. and 0ir inia "ud# D# are held 9ointl# and solidaril# lia)le with 7+RIN+ for the reliefs awarded )# the lower %ourt.3!* to >S? &. and hen%e. Spouses "ud# D# and /a)riel D#. as and for attorne#:s feesF and %.<!5
.!4 1he C+ ruled that <HwIhen the offi%ers of 7+RIN+ failed or refused to su)2it the ori inal )ills of ladin .CEERE(ORE. 1an9ut%o. to witA CEERE(ORE. and 7er%ado. 1an9ut%o. 1he %o2plaint a ainst 1an9ut%o.5*4.< !& It further stated that the evident ne li en%e of the )an6:s offi%ers <does not e@%ulpate defendant 7arina fro2 the fa%t that it owes plaintiff )an6 the a2ount %overed )# the su)9e%t e@port do%u2ents. the D# spouses.to pa# &$G of the total a2ount due. dis2issed the %o2plaint a ainst 1an9ut%o. 7+RIN+ violated the %ondition under whi%h pa#2ent )# Phil)an6 was 2ade.43 or e=uivalent to P!&. In the assailed !! "ul# !$$4 de%ision. 7er%ado and ICSI. the fore oin pre2ises %onsidered.E2phasis in the ori inal1he C+ held 7arina. the R1C ruled that the o)li ation to pa# Phil)an6 was 7arina:s %orporate lia)ilit#. with interest on the prin%ipal su2 at &!G per annu2 fro2 the ti2e of the 9udi%ial de2and.
ne otia)le )ills of ladin . +lindo an. the Court stated.!3 If D# were truthful. the C+ upheld the R1C:s 9ud 2ent a)solvin 7er%ado of lia)ilit# )ut reversed the findin on D#:s uilt.** 1hus. 1hereafter.1he C+ pointed out that 1an9ut%o and +lindo an represented 7arina in all its )an6in transa%tions with Phil)an6. it would appear that. 1an9ut%o. %ontrar# to her %lai2s. point to a %on%ert of a%tion dire%ted towards the sa2e end. su)2ission of the ori inal )ills of ladin evin%ed not onl# a failure to %o2pl# with the )an6:s re=uire2ents )ut a 2ode to divest Phil)an6 of its funds. as Phil)an6:s +ssistant 0i%e President. 1he do%u2ents 7arina:s offi%ers ne otiated with the )an6 were 2ar6ed <non. with all the ne%essar# overn2ent %learan%es. reason and %o22on e@perien%e.7er%ado-.*4
. 1hat state2ent turned out to )e an a%t of 2isrepresentation )# 1an9ut%o and +lindo an. the C+ noted that althou h there is no dire%t eviden%e of %onspira%# )etween 7arina and D#. !5 +s to the lia)ilit# of the )an6:s offi%ers. there were so2e loans she did not 6now of )ut still re%o22ended )e%ause 7er%ado re%o22ended the2. the C+ %on%luded that there was %ollusion a2on 1an9ut%o. 1he C+ ruled that D# was 9ointl# and solidaril# lia)le with 7arina. 1he C+ stated that <the transa%tions under =uestion transpired )e%ause of "ud# D#:s approval.*& (urther. whi%h onl# D# %ould provide.*$ 1he C+ %on%luded that. she had no su)stantial duties or authorit#F she %ould not approve an#thin F she had no %ontrol of )an6 operations . <%ir%u2stan%es.ne otia)le )ills of ladin )e%ause the )ills %ontained a re2ar6 that the oods were alread# on )oard.<*! 1he C+ stated that 1an9ut%o and +lindo an 2ade it appear that oods were on )oard the %arrier.she %lai2ed it was 7er%ado who oversaw dail# operations-F and she would si n i2portant do%u2ents without readin the2.<!' 1he C+ also held that D#:s testi2on# on her fun%tions as )an6 2ana er was not )elieva)le )e%ause it <defied lo i%. She %lai2ed that )e%ause of the volu2e of her wor6. and D#. D# approved the transa%tions su)9e%t of this %ase. the onl# 2issin %o2ponent to se%ure Phil)an6:s pa#2ent was the a%%eptan%e of the non. 1he C+ also noted that Phil)an6 sent various de2and letters to the forwarders that issued the non. and +lindo an. if read to ether. She further %lai2ed that she did not read all the papers )rou ht to her to si n )e%ause she did not have enou h ti2e.<!4 1he C+ noted that D# %lai2ed to have no authorit# to approve 7arina:s transa%tions sin%e loan transa%tions were approved )# the head offi%e )ased on the re%o22endation of the )ran%h 2ana er .ne otia)le< )ut the sa2e were a%%epted )# the )an6 upon 1an9ut%o and +lindo an:s pro2ise that the ori inal %opies of the )ills of ladin would )e presented later on. 1he C+ held that 7arina:s non.
. 1+N">1CO +ND +BINDO/+N 1O DE(R+>D RESPONDEN1 O( 1EE 0+B>E O( 1EE S>B"EC1 EMPOR1S SEIPPIN/ DOC>7EN1S.A +nd who 2ade this pro2iseN +A "oel +lindo an and Ce8ar 1an9ut%o. D# and we pro2ised her that we will produ%e the ori inal Bills of Badin <. <IIt is )ein arran ed with 7rs. 1he eviden%e on re%ord %learl# )ears out D#:s lia)ilit#. .1he Issue Petitioners raise this sole issueA CEE1EER OR NO1 1EE RESPONDEN1 PEIBB+NJ:S E0IDENCE E+0E S>((ICIEN1BK PRO0ED 1E+1 PE1I1IONER ">DK DK C+S IN CONSPIR+CKLCOBB>SION CI1E DE(END+N1S 7+RIN+. there would have )een no %o2pleted transa%tion without D#:s approval.ne otia)le %op#<.D#N +A Be%ause when we 2ade follow up on these la%6in do%u2ents. D# )rou ht in 7arina:s a%%ount to Phil)an6*5 and she dire%tl# transa%ted with 7arina:s offi%ers.A +nd wh# were these a%%epted )# #our )an6N +A 1his was approved on the pro2ise that the# will produ%e or present to us the ori inal Bills of Badin .A +nd to who2 was this pro2ise or state2ent to produ%e thene otia)le or ori inal Bills of Badin 2adeN +A 1his was pro2ised to 7rs.ne otia)le Bills of Badin N +A 1he for2 itself states <non. Eer a%t of approvin the transa%tion was the sin le 2ost i2portant fa%tor that allowed 1an9ut%o and +lindo an:s s%he2e to su%%eed. 7er%ado testifiedA .A Ch# do #ou 6now that there are non.*5 1he Court:s Rulin 1he Court denies the petition and affir2s the de%ision of the C+.
. D#.*' 7ore i2portantl#. the ne otia)le Bills of Badin . Based on the testi2onies of the witnesses. the# would tell usH.A +nd wh# do #ou 6now that there was su%h a pro2ise 2ade to 7rs. . .
D#. sir. Ee onl# si ned the e@port do%u2ents )e%ause D# approved the sa2e.*4 @@@@ .A Now.the E@port Depart2ent. in that %ase. what parti%ular fun%tion or duties does she perfor2N +A +s an +rea head. do #ou 6now what herduties are. In short.A Did #ou %onsider that as irre ular )e%ause the Bills of Badin ne otia)le and #et the sa2e were )ein ne otiatedN +A I would %onsider it re ular if it was approved )# 2# superior. it was ne otiated )ased on the approval of 7rs.A Cere #ou the one who sou ht the approval of those do%u2ents. 7er%ado. @@@@ . sir. #ou said that she is an +rea head. she approves the ne otiations of our e@port )ills. . is that possi)le. )# hi2self. @ @ @ @*3 .A In #our e@perien%e. who approved theseship2entsN the pa#2ent to 7arina International for arenon. as +rea EeadN +A +s an +rea Eead.A Chen #ou said that she is in %har e of the lendin operations of the several )ran%hes of the )an6. . . she is our over all )oss. +s 7er%ado hi2self testifiedA . it was not approved )# the2. thru 7rs. %ould not approve the su)9e%t transa%tions. onl# D# %ould have supplied the 6e# ele2ent that 1an9ut%o and +lindo an neededA the )an6:s approval. D#N +A No. she is in %har e of the lendin operations of several )ran%hes under her supervision as well as the operation of other )ran%hes.A So in #our e@perien%e.
. Ee had no su%h authorit#. in this lendin operation. )# .si%. other than this alle ed su)9e%t 2atterN +A Durin the ti2e )# the other Eeads.ne otia)ledo%u2ent %an )e ne otiatedN +A Cell.A Now. where a non.+s the C+ noted.
si%.A Please present the sa2e to the Eonora)le Court. D# appears in these do%u2entsN +A 1his is her initial and so2e are her a%tual si natures.4* D#:s lia)ilit# was further e@plained )# Phil)an6:s internal auditor. %onsiderin that the transa%tion was not %onsidered a <re ular< )an6 transa%tion. D#.
.A Kou said that in these do%u2ents or in these approval slips. sin%e she is our +rea Eead and the Eead of the Bendin +rea Center. is there an# other offi%er authori8ed to approve these pa#2entsN +A She is the onl# one. +)alos testified that D# a%ted )e#ond her authorit#. aside fro2 7rs. do #ou have an# proof to show that she approved the pa#2ent for these e@port )illsN +A Kes.+)alos-. sir. the approval on these e@port )ills are shown in these approval slips of 7rs.so the +ssistant sou ht the approval of 7rs. Baurito +)alos . . the e@port )ills. +A 1hese are the proofs.4$ @@@@ . parti%ularl# the la%6 of ori inal )ill of Badin . D# approved the pa#2ent on these e@port )ills.A Kou said a while a o that 7rs. sin%e this is an a%%ount soli%ited )# her and sin%e she has the authorit# to approve the dis%repan%ies. Bo8anoA 1hese are approval slips.A Chen pa#2ent on e@port )ills are 2ade. +ltunaA Eow do #ou %ate ori8e these do%u2ents %ounselN +tt#. D#. our E@port Se%tion .4& @@@@ +tt#. D#. will #ou show to us where the approval of 7rs.4! @@@@ .+A Sin%e these do%u2ents are in%o2plete. . sir.
. that 2eans if there is no dis%repan%# in the e@port )ills that the )an6 is pur%hasin that 2eans that all the do%u2ents are %lean and in a%%ordan%e with the ter2s and %onditions. onl# re ular transa%tions. there is a ver# i2portant vital do%u2ent that is 2issin here and this is the ne otia)le Bills of Badin )e%ause the Betters of Credit states . Do #ou 6now. then it %annot )e sent for rei2)urse2ent a)road. .44 . it is an irre ular transa%tion.not ori inal Bills of Badin and the ter2s and %onditions of the Betters of Credit e@pressl# stated that it has to )e supported )# a ne otia)le Bills of Badin .these are )ein sent to the %orrespondin )an6 for rei2)urse2ent. in the %ourse of our review of the do%u2ents it appears that.E2phasis supplied@@@@ . . therefore. she has no authorit# re ardin this transa%tion. wh# do #ou sa# now that she is not authori8ed to approve the ne otiation of these e@port )illsN +A Be%ause in a ne otiation of e@port )ills supposed to )e. it is an unauthori8ed approval )e%ause as I said. these e@port )ills.Chen we sa# re ular transa%tion.ne otia)le Bills of Badin were ne otiated and defendant 7arina International 7ar6etin Corporation was a)le to et pa#2ent of these e@port )ills. i22ediatel# when we dis%overed these thin s. "ud# D# was an +ssistant 0i%e President of the )an6 and in %har e of +rea II or Balintawa6 Bran%h. nor2all#. i22ediatel# we %aused an investi ation )e%ause this is not a re ular transa%tion. on%e the )an6 or an# )an6 pur%hased an e@port )ills.A Kou said a while a o that 7rs. #ou said that per #our audit.si%.supposedl# pur%hased and paid. . it was never )een sent )# the )ran%h )e%ause there was an irre ular pra%ti%e in this parti%ular transa%tion. In this %ase. when we ot these %opies. what we did is we as6ed the2 to su)2it all these supposedl# e@port )ills.A Now.+A Cell. If there is . "ud# D# has no authorit# over it. it appears that "ud# D# approved all the transa%tions )ut I repeat.the ter2s and %onditions that it has to )e supported )# a ne otia)le Bills of Badin .si%. while a%%o2panied onl# )# a non. that 2eans all the do%u2ents are %o2plete. So. then this %an )e pro%essed )ut in this %ase.si%. so in this parti%ular %ase.si%. that the . who approved the pa#2ent of these e@port )illsN +A 1his one I would sa# that if ever it was passed or approved. Now.si%. the )ran%h was holdin all these supposedl# e@port )ills )e%ause there was no ori inal Bills of Badin . it is a violation of the ter2s and %onditions and 7rs..and also fro2 the testi2on# athered fro2 the offi%ers of the )an6. the transa%tion is not re ular. fro2 #our audit.. that there were nu2erous unpaid e@port )ills. Now.
#ou should et so2ethin in return. )ased on his unit:s investi ation.no e@port )ills to tal6 a)out 45 here. 1he# had to se%ure it )eforehand. whi%h the# 6new the# %ould not ne otiate with an# other )an6 in the re ular %ourse of )usiness.. +ll the ne otiations were done with 7rs.si%-. pur%hase it and %redit the a%%ount of the %lient. 1he# would not have en a ed in the ela)orate s%he2e D %on%o%tin fi%titious e@port )ills and 2a6in the2 appear to have one throu h all the ne%essar# overn2ent pro%edures D if the# were not assured of su%%ess in the end. D# has no authorit# to approve su%h 6ind of ne otiationN +A Be%ause this is not nor2al.A +nd wh# do #ou sa# that 7rs. 1his has )een supported later on when the# found out that so2eti2es in "une. the Court a rees with the C+:s findin that D# %olluded with 1an9ut%o and +lindo an in the latter:s s%he2e to divest the )an6 of its funds.ne otia)le e@port do%u2ents.. a short note wherein the# indi%ated that it is an in%o2plete do%u2ent and despite this. . when #ou pur%hased an e@port )ill. +A @ @ @ @ Our position in the later part. D# said < o ahead.1âwphi1
. the )an6 %annot et rei2)urse2ent )e%ause there was no ship2ent on the oods that was . the# provised . 7er%ado %learl# showed that he followed the orders of 7rs. that 7rs. when we o over all the do%u2ents and the testi2onies of all the other ran6 and file as well as the other offi%ers. D# alone was responsi)le for allowin 7arina to o)tain funds fro2 the )an6.E2phasis supplied(inall#. so therefore.E2phasis supplied+)alos also testified that.si%)ein pur%hased. D#. the# see6 alread# an approval fro2 7rs.< @ @ @ @45 . the )an6 will )e a)le to et rei2)urse2ent. the assuran%e of D#:s approval was indispensa)le to their plans. 7rs. D#. or the# would not have i2ple2ented the s%he2e 6nowin that the out%o2e was un%ertain and %ould have possi)l# e@posed the2 to lia)ilit#. not onl# ver)al )ut written approval. 1an9ut%o and +lindo an were holdin non. she still approved the pur%hase of 7arina:s e@port )ills. 7r. 1hat 2eans. 1hus. there is nothin . D# has authorit#. In this %ase. D# 6new that 7arina %ould not present the ne otia)le Bills of Badin F #et. It was alread# what we %all an irre ular transa%tion )e%ause if #ou parted HwithI so2ethin . D# to ether with the defendant 7arina International in this %ase. this Efren 7er%ado and the rest of the offi%ers.
SO ORDERED. downpla#ed her 6nowled e of )an6in pro%edures.R. and with her #ears of e@perien%e in the )an6in se%tor. CEERE(ORE. %ould not have 6nown the rave i2pli%ation and %onse=uent effe%t of her a%tion. (or that. Nor is this Court in%lined to a%%ept D#:s %lai2 of in%o2peten%e and ne li en%e. Ce +((IR7 the De%ision of the Court of +ppeals dated !! "ul# !$$4 and Resolution dated &' (e)ruar# !$$5 in C+. C0 No. she even 2ade herself appear as an in%onse=uential )an6 offi%er without power or authorit# nor2all# iven to offi%ers in her position. 1he 2ore lo i%al %on%lusion is that D# was full# aware that 1an9ut%o and +lindo an were out to defraud Phil)an6 and allowed herself to )e part of the s%he2e. we DENK the petition.D# tried to %onvin%e the trial %ourt that she should not )e held lia)le for the su)9e%t transa%tions. It is diffi%ult for the Court to )elieve that so2eone in D#:s position. and allowed herself to )e painted as a ne li ent offi%er who would si2pl# si n an#thin her staff hands to her without readin the2. In her desperation. /. 5'**&.
. she 2ust )e held a%%ounta)le.