People v.
Puig & Porras The RTC Judge based his conclusion that there was no probable cause
Facts:
Respondents were conspiring, confederating, and helping one another, with
grave abuse of confidence, being the Cashier and Bookkeeper of the Rural
Bank of Pototan, Inc., Pototan, Iloilo, without the knowledge and/or consent
of the management of the Bank and with intent of gain, did then and there
willfully, unlawfully and feloniously take, steal and carry away the sum of
P15,000.00, Philippine Currency, to the damage and prejudice of the said
bank in the aforesaid amount.
However, the trial court did not find the existence of probable cause
because (1) the element of ‘taking without the consent of the owners’ was
missing on the ground that it is the depositors-clients, and not the Bank,
which filed the complaint in these cases, who are the owners of the money
allegedly taken by respondents and hence, are the real parties-in-interest;
and (2) the Informations are bereft of the phrase alleging "dependence,
guardianship or vigilance between the respondents and the offended party
that would have created a high degree of confidence between them which
the respondents could have abused.".
Issue:
Whether or not the 112 informations for qualified theft sufficiently allege the
element of taking without the consent of the owner, and the qualifying
circumstance of grave abuse of confidence.
Held:
Yes.
The dismissal by the RTC of the criminal cases was allegedly due to
insufficiency of the Informations and, therefore, because of this defect,
there is no basis for the existence of probable cause which will justify the
issuance of the warrant of arrest. Petitioner assails the dismissal
contending that the Informations for Qualified Theft sufficiently state facts
which constitute (a) the qualifying circumstance of grave abuse of
confidence; and (b) the element of taking, with intent to gain and without
the consent of the owner, which is the Bank.
simply on the insufficiency of the allegations in the Informations concerning
the facts constitutive of the elements of the offense charged.
The relationship between banks and depositors has been held to be that of
creditor and debtor. Articles 1953 and 1980 of the New Civil Code, as
appropriately pointed out by petitioner, provide as follows:
Article 1953. A person who receives a loan of money or any other fungible
thing acquires the ownership thereof, and is bound to pay to the creditor an
equal amount of the same kind and quality.
Article 1980. Fixed, savings, and current deposits of money in banks and
similar institutions shall be governed by the provisions concerning loan.
In a long line of cases involving Qualified Theft, this Court has firmly
established the nature of possession by the Bank of the money deposits
therein, and the duties being performed by its employees who have
custody of the money or have come into possession of it. The Court has
consistently considered the allegations in the Information that such
employees acted with grave abuse of confidence, to the damage and
prejudice of the Bank, without particularly referring to it as owner of the
money deposits, as sufficient to make out a case of Qualified Theft.
G.R. No. L-60033 April 4, 1984
TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and TERESITA
SANTOS, petitioners,
THE CITY FISCAL OF MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY
FISCAL FELIZARDO N. LOTA and CLEMENT DAVID, respondents.
Nature: Petition for prohibition and injunction with a prayer for the
immediate issuance of restraining order and/or writ of preliminary injunction
seeking to prohibit the public respondent which is the City Fiscal of Manila
from proceeding with the preliminary investigation, in which they were
charged by private respondent Clement David
Keywords: Bank deposits are loans, mutuum, estafa, criminal charge, civil
case, thrift bank, NSLA
Summary: From March 1979 to March 1981, Clement David made several
investments with the National Savings and Loan Association (NSLA). On
March 21, 1981, the Bangko Sentral placed the bank under receivership.
Upon David’s request, petitioners Guingona and Martin issued a joint
promissory note, absorbing the obligations of the bank. On July 17, 1981,
they divided the indebtedness. David filed a complaint for estafa and
violation of Central Bank Circular No. 364 and related regulations regarding
foreign exchange transactions before the Office of the City Fiscal of Manila.
Petitioners filed the herein petition for prohibition and injunction with a
prayer for immediate issuance of restraining order and/or writ of preliminary
injunction to enjoin the public respondents to proceed with the
preliminary investigation on the ground that the petitioners’ obligation is civil
in nature.
MAKASIAR, Actg. C.J.
Facts: David invested several deposits with the Nation Savings and Loan
Association [NSLA]. He said that he was induced into making said
investments by an Australian national who was a close associate of the
petitioners [NSLA officials]. On March 1981, NSLA was placed under
receivership by the Central Bank, so David filed claims for his and his
sister’s investments.
On June 1981, Guingona and Martin, upon David’s request, assumed the
bank’s obligation to David by executing a joint promissory note. On July
1981, David received a report that only a portion of his investments was
entered in the NSLA records.
On December 1981, David filed I.S. No. 81-31938 in the Office of the City
Fiscal, which case was assigned to Asst. City Fiscal Lota for preliminary
investigation. David charged petitioners with estafa and violation of Central
Bank Circular No. 364 and related regulations on foreign exchange
transactions.
Petitioners moved to dismiss the charges against them for lack of
jurisdiction because David's claims allegedly comprised a purely civil
obligation, but the motion was denied. After the presentation of David's
principal witness, petitioners filed this petition for prohibition and injunction
because:
a. The production of various documents showed that the transactions
between David and NSLA were simple loans (civil obligations which were
novated when Guingona and Martin assumed them)
b. David's principal witness testified that the duplicate originals of the
instruments of indebtedness were all on file with NSLA.
A TRO was issued ordering the respondents to refrain from proceeding with
the preliminary investigation in I.S. No. 81-31938.
Petitioners’ liability is civil in nature, so respondents have no jurisdiction
over the estafa charge. TRO CORRECTLY ISSUED.
Issue:
1. Whether the contract between NSLA and David is a contract of depositor
or a contract of loan, which answer determines whether the City Fiscal has
the jurisdiction to file a case for estafa
2. Whether there was a violation of Central Bank Circular No. 364
Held:
1. When David invested his money on time and savings deposits with
NSLA, the contract that was perfected was a contract of simple loan or
mutuum and not a contract of deposit. Hence, the relationship between
David and NSLA is that of creditor and debtor, consequently, the ownership
of the amount deposited was transmitted to the Bank upon the perfection of
the contract and it can make use of the amount deposited for its banking
operations, such as to pay interests on deposits and to pay withdrawals..
While the Bank has the obligation to return the amount deposited, it has no
obligation to return or deliver the same money that was deposited. NSLA’s
failure to return the amount deposited will not constitute estafa through
misappropriation punishable under Article 315, par. L (b) of the Revised
Penal Code, but it will only give rise to civil liability over which the public
respondents have no jurisdiction.
Considering that petitioners’ liability is purely civil in nature and that there is great injustice to petitioners and would render meaningless the proper
no clear showing that they engaged in foreign exchange transactions, administration of justice
public respondents acted without jurisdiction when they investigated the
charges against the petitioners. Public respondents should be restrained Ruling: WHEREFORE, THE PETITION IS HEREBY GRANTED; THE
from further proceeding with the criminal case for to allow the case to TEMPORARY RESTRAINING ORDER PREVIOUSLY ISSUED IS MADE
continue would work great injustice to petitioners and would render PERMANENT.
meaningless the proper administration of justice.
Note:
Even granting that NSLA’s failure to pay the time and savings deposits
would constitute a violation of RPC 315, paragraph 1(b), any incipient GENERAL RULE: Criminal prosecution may not be blocked by court
criminal liability was deemed avoided. When NSLA was placed under prohibition or injunction.
receivership, Guingona and Martin assumed the obligation to David,
thereby resulting in the novation of the original contractual obligation. The EXCEPTIONS
original trust relation between NSLA and David was converted into an 1. For the orderly administration of justice
ordinary debtor-creditor relation between the petitioners and David. While it 2. To prevent the use of the strong arm of the law in an oppressive and
is true that novation does not extinguish criminal liability, it may prevent the vindictive manner
rise of criminal liability as long as it occurs prior to the filing of the criminal 3. To avoid multiplicity of actions
information in court. 4. To afford adequate protection to constitutional rights
5. In proper cases, because the statute relied upon is unconstitutional or
2. Petitioner Guingona merely accommodated the request of the Nation was held invalid
Savings and loan Association in order to clear the bank draft through his
dollar account because the bank did not have a dollar account. Immediately
after the bank draft was cleared, petitioner Guingona authorized Nation
Savings and Loan Association to withdraw the same in order to be utilized
by the bank for its operations. It is safe to assume that the U.S. dollars
were converted first into Philippine pesos before they were accepted and
deposited in Nation Savings and Loan Association, because the bank is
presumed to have followed the ordinary course of the business which is to
accept deposits in Philippine currency only, and that the transaction was
regular and fair, in the absence of a clear and convincing evidence to the PEOPLE v. HENRY GO G.R. No. 168539 March 25, 2014 Corrupt
contrary. practices of
public officers, R.A. 3019, Conspiracy
In conclusion, considering that the liability of the petitioners is purely civil in MARCH 18, 2019
nature and that there is no clear showing that they engaged in foreign
exchange transactions, We hold that the public respondents acted without
jurisdiction when they investigated the charges against the petitioners. FACTS:
Consequently, public respondents should be restrained from further Before the Court is a petition for review on certiorari assailing the
proceeding with the criminal case for to allow the case to continue, even if Resolution of the Third Division of the Sandiganbayan (SB) dated June 2,
the petitioners could have appealed to the Ministry of Justice, would work 2005 which quashed the Information filed against herein respondent for
alleged violation of Section 3 (g) of Republic Act No. 3019 (R.A. 3019),
otherwise known as the Anti-Graft and Corrupt Practices Act.
Herein respondent was indicted for violation of Section 3(g) of R.A. 3019.
While there was likewise a finding of probable cause against Secretary
Enrile, he was no longer indicted because he died prior to the issuance of
the resolution finding probable cause.
Thus, in an Information, respondent was charged before the
Sandiganbayan.
Respondent filed a Motion to Quash the Information filed against him on
the ground that the operative facts adduced therein do not constitute an
offense under Section 3(g) of R.A. 3019.
It appearing that Henry T. Go, the lone accused in this case is a private
person and his alleged co-conspirator-public official was already deceased
long before this case was filed in court, for lack of jurisdiction over the
person of the accused, the SB granted the Motion to Quash and the
Information filed was ordered quashed and dismissed.
ISSUE:
WHETHER OR NOT respondent, a private person, may be indicted for
conspiracy in violating Section 3(g) of R.A. 3019 even if the public officer,
with whom he was alleged to have conspired, has died prior to the filing of
the Information.
RULING:
The Court finds the petition meritorious.
Section 3 (g) of R.A. 3019 provides:
Sec. 3. Corrupt practices of public officers. – In addition to acts or
omissions of public officers already penalized by existing law, the following
shall constitute corrupt practices of any public officer and are hereby
declared to be unlawful:
xxxx
(g) Entering, on behalf of the Government, into any contract or transaction
manifestly and grossly disadvantageous to the same, whether or not the
public officer profited or will profit thereby.
The elements of the above provision are:
(1) that the accused is a public officer;
(2) that he entered into a contract or transaction on behalf of the
government; and
(3) that such contract or transaction is grossly and manifestly
disadvantageous to the government.
At the outset, it bears to reiterate the settled rule that private persons, when
acting in conspiracy with public officers, may be indicted and, if found guilty,
held liable for the pertinent offenses under Section 3 of R.A. 3019, in
consonance with the avowed policy of the anti-graft law to repress certain
acts of public officers and private persons alike constituting graft or corrupt
practices act or which may lead thereto.
The requirement before a private person may be indicted for violation of
Section 3(g) of R.A. 3019, among others, is that such private person must
be alleged to have acted in conspiracy with a public officer.
The law, however, does not require that such person must, in all instances,
be indicted together with the public officer. If circumstances exist where the
public officer may no longer be charged in court, as in the present case
where the public officer has already died, the private person may be
indicted alone.
Indeed, it is not necessary to join all alleged co-conspirators in an
indictment for conspiracy. If two or more persons enter into a conspiracy,
any act done by any of them pursuant to the agreement is, in contemplation
of law, the act of each of them and they are jointly responsible therefor.
This means that everything said, written or done by any of the conspirators
in execution or furtherance of the common purpose is deemed to have
been said, done, or written by each of them and it makes no difference
whether the actual actor is alive or dead, sane or insane at the time of trial.
The death of one of two or more conspirators does not prevent the
conviction of the survivor or survivors.
Paulino Gullas v. PNB (G.R. No. L-43191)
Facts:
Petitioner Gullas maintains a current account with herein respondent PNB.
He together with one Pedro Lopez signed as endorsers of a Warrant issued
by the US Veterans Bureau payable to the order of one Francisco Bacos.
PNB cashed the check but was subsequently dishonored by the Insular
Treasurer. PNB then sent notices to petitioner which could not be delivered
to him at the time because he was in Manila. PNB in the letter informed the
petitioner the outstanding balance on his account was applied to the part
payment of the dishonored check. Upon petitioner’s return, he received the
notice of dishonor and immediately paid the unpaid balance of the warrant.
As a consequence of these, petitioner was inconvenienced when his
insurance was not paid due to lack of funds and was publicized widely at
his area to his mortification.
Issue:
Whether or not PNB has the right to apply petitioner’s deposit to his debt to
the bank.
Ruling: NO.
As a general rule, a bank has a right of set off of the deposits in its hands
for the payment of any indebtedness to it on the part of a depositor. The
Civil Code contains provisions regarding compensation (set off) and
deposit. The portions of Philippine law provide that compensation shall take
place when two persons are reciprocally creditor and debtor of each other.
In this connection, it has been held that the relation existing between a
depositor and a bank is that of creditor and debtor. [General Rule]
Starting, therefore, from the premise that the Philippine National Bank had
with respect to the deposit of Gullas a right of set off, we next consider if
that remedy was enforced properly. The fact we believe is undeniable that
prior to the mailing of notice of dishonor, and without waiting for any action
by Gullas, the bank made use of the money standing in his account to
make good for the treasury warrant.
Gullas was merely an indorser and had issued in good faith. As to an
indorser, the situation is different and notice should actually have been
given him in order that he might protect his interests. We accordingly are of
the opinion that the action of the bank was prejudicial to Gullas.
Negotiable Instruments Case Digest: BPI V. CA (2000)
G.R. No. 112392 February 29, 2000
Lessons Applicable: Liabilities of the Parties (Negotiable
Instruments Law)
FACTS:
• September 3, 1987: Bejanmin Napiza deposited in Foreign
Currency Deposit Unit (FCDU) Savings Account which he
maintained in BPI a Continental Bank Manager's Check
dated August 17, 1984, payable to "cash" $2,500.00
•
• check belonged to Henry who went to the office of
Napiza and requested him to deposit the check in his
dollar account by way of accommodation and for the
purpose of clearing the same.
•
• Napiza acceded, and agreed to deliver to Chan a
signed blank withdrawal slip, with the
understanding that as soon as the check is
cleared, both of them would go to the bank to
withdraw
•
• October 23, 1984: Using the blank withdrawal slip given by
Napiza to Chan, Ruben Gayon, Jr. was able to withdraw
•
• the withdrawal slip shows that the amount was payable
to Ramon A. de Guzman and Agnes C. de Guzman and
was duly initialed by the branch assistant manager,
Teresita Lindo
•
• November 20, 1984: BPI received communication from the
Wells Fargo Bank International of New York that check
deposited by Napiza was a counterfeit check because it was
"not of the type or style of checks issued by Continental
Bank International."
•
• Mr. Ariel Reyes, manager of BPI, instructed one of its
employees, Benjamin D. Napiza IV, who is Napiza's son, to
inform his father that the check bounced.
• • Having admitted that it committed a "mistake" in not
• Reyes himself sent a telegram to Napiza regarding the waiting for the clearance of the check before
dishonor of the check authorizing the withdrawal of its value or proceeds, BPI
• should suffer the resultant loss.
• Napiza's son told Reyes that: •
• • CA: Affirmed the lower courts decision
• check been assigned "for encashment" to Ramon •
A. de Guzman and/or Agnes C. de Guzman after it • BPI committed "clears gross negligence" in allowing
shall have been cleared upon instruction of Chan Ruben Gayon, Jr. to withdraw the money without
• presenting BPI's passbook and, before the check was
• his father immediately tried to contact Chan but cleared and in crediting the amount indicated therein in
Chan was out of town Napiza's account.
• •
• Napiza's son undertook to return the amount of $2,500.00 • BPI claims that Napiza, having affixed his signature at the
to BPI dorsal side of the check, should be liable in accordance to
• Sec. 66 of the Negotiable Instrument Law
• August 12, 1986: BPI filed a complaint against Napiza for •
the return of $2,500.00 or the prevailing peso equivalent Sec. 66. Liability of general indorser. — Every indorser who
plus legal interest, attorney's fees, and litigation and/or indorses without qualification, warrants to all subsequent holders
costs of suit in due course —
• (a) The matters and things mentioned in subdivisions (a), (b),
• Napiza: and (c) of the next preceding section; and
• (b) That the instrument is at the time of his indorsement, valid
• admitting that he indeed signed a "blank" and subsisting.
withdrawal slip with the understanding that the And, in addition, he engages that on due presentment, it shall be
amount deposited would be withdrawn only after accepted or paid, or both, as the case may be, according to its
the check in question has been cleared. tenor, and that if it be dishonored, and the necessary proceedings
• on dishonor be duly taken, he will pay the amount thereof to the
• However, without his knowledge, it was withdrawn holder, or to any subsequent indorser who may be compelled to
through collusion with one of BPI's employees. pay it.
•
• BPI aslo filed a motion for admission of a third party Sec. 65, on the other hand, provides for the following warranties
complaint against Chan. He alleged that "thru strategem of a person negotiating an instrument by delivery or by qualified
and/or manipulation," Chan was able to withdraw the indorsement: (a) that the instrument is genuine and in all
amount of $2,500.00 even without Napiza's passbook. respects what it purports to be; (b) that he has a good title to it,
• and (c) that all prior parties had capacity to contract.
• November 4, 1991: Lower Court dismissed the complaint.
•
ISSUE: W/N Napiza can be held liable as an indorser or • This is in consonance with the rule that a negotiable
accommodation party instrument, such as a check, whether a manager's
check or ordinary check, is not legal tender
HELD: NO. •
• Negligence is the omission to do something which a
• ordinarily Napiza may be held liable as an indorser of the reasonable man, guided by those considerations which
check or even as an accommodation party ordinarily regulate the conduct of human affairs, would do,
• or the doing of something which a prudent and reasonable
• However, to hold Napiza liable for the amount of the man would do
check he deposited by the strict application of the law •
and without considering the attending circumstances in • While it is true that Napiza's having signed a blank
the case would result in an injustice and in the erosion withdrawal slip set in motion the events that resulted in the
of the public trust in the banking system. withdrawal and encashment of the counterfeit check, the
• negligence of BPI's personnel was the proximate cause of
• The interest of justice thus demands looking into the the loss that petitioner sustained.
events that led to the encashment of the check. •
• • Proximate cause, which is determined by a mixed
• under the Philippine foreign currency deposit system, two consideration of logic, common sense, policy and
requisites must be presented to petitioner bank by the precedent, is "that cause, which, in natural and
person withdrawing an amount: continuous sequence, unbroken by any efficient
• intervening cause, produces the injury, and without
• (a) a duly filled-up withdrawal slip, and which the result would not have occurred."
• •
• Napiza signed a blank deposit slip • The proximate cause = disregard of its own rules
• and the clearing requirement in the banking
• BUT withdrawal slip itself indicates a special system
instruction that the amount is payable to "Ramon Citibank v. Sps. Cabamongan (G.R. No. 146918)
A. de Guzman &/or Agnes C. de Guzman."
• Facts:
• (b) the depositor's passbook Respondent spouses opened a joint foreign currency time deposit in trust
• for their sons at petitioner’s Makati branch. Prior to maturity, a person
• In depositing the check in his name, Napiza did not become claiming to be Carmelita Cabamongan pre-terminated the said account
the outright owner of the amount stated therein. By upon presenting identification cards. Though not being able to surrender
depositing the check with BPI, he was, in a way, merely the Original Certificate of Deposit, the money was released to her despite
designating BPI as the collecting bank. the release and waiver documents not being notarized. Respondent
• spouses learned of the incident and informed petitioner bank that Carmelita
could not have pre-terminated the account since she was in the US at that
time. The spouses made a formal demand of payment of the deposit and
consequently, filed a complaint when petitioner refused to pay. Petitioner
bank insists that it was not negligent of its duties since the deposit was
released upon proper identification and verification. RTC ruled in favor of
the spouses. CA affirmed.
Issue:
Whether or not petitioner bank was negligent in its duties as to be liable for
damages
Ruling: YES.
The Court has repeatedly emphasized that, since the banking business is
impressed with public interest, of paramount importance thereto is the trust
and confidence of the public in general. Consequently, the highest degree
of diligence is expected, and high standards of integrity and performance
are even required, of it. By the nature of its functions, a bank is “under
obligation to treat the accounts of its depositors with meticulous care,
always having in mind the fiduciary nature of their relationship.”
In this case, it has been sufficiently shown that the signatures of Carmelita
in the forms for pretermination of deposits are forgeries. Citibank, with its
signature verification procedure, failed to detect the forgery. Its negligence
consisted in the omission of that degree of diligence required of banks. The
Court has held that a bank is “bound to know the signatures of its
customers; and if it pays a forged check, it must be considered as making
the payment out of its own funds, and cannot ordinarily charge the amount
so paid to the account of the depositor whose name was forged.” Such
principle equally applies here.
The Court agrees with the observation of the CA that Citibank, thru Account
Officer San Pedro, openly courted disaster when despite noticing
discrepancies in the signature and photograph of the person claiming to be
Carmelita and the failure to surrender the original certificate of time deposit,
the pretermination of the account was allowed. Even the waiver document
was not notarized, a procedure meant to protect the bank. For not
observing the degree of diligence required of banking institutions, whose
business is impressed with public interest, Citibank is liable for damages.
Vitug v. CA
G.R. No. 82027, March 29, 1990
Spouses Dolores and Romarico Vitug entered into a survivorship
agreement with the Bank of American National Trust and Savings
Association. The said agreement contained the following stipulations:
(1) All money deposited and to be deposited with the Bank in their joint
savings current account shall be both their property and shall be payable to
and collectible or withdrawable by either or any of them during their
lifetime; and
(2) After the death of one of them, the same shall belong to and be the sole
property of the surviving spouse and payable to and collectible or
withdrawable by such survivor
Dolores died naming Rowena Corona in her wills as executrix. Romarico
later filed a motion asking authority to sell certain shares of stock and real
property belonging to the estate to cover his advances to the estate which he
claimed were personal funds withdrawn from their savings account.
Rowena opposed on the ground that the same funds withdrawn from the
savings account were conjugal partnership properties and part of the estate.
Hence, there should be no reimbursement. On the other hand, Romarico
insists that the same are his exclusive property acquired through the
survivorship agreement.
ISSUE: Whether or not the funds of the savings account subject of the
survivorship agreement were conjugal partnership properties and part of
the estate
No. The Court ruled that a Survivorship Agreement is neither a donation
mortis causa nor a donation inter vivos. It is in the nature of an aleatory
contract whereby one or both of the parties reciprocally bind themselves to
give or to do something in consideration of what the other shall give or do
upon the happening of an event which is to occur at an indeterminate time
or is uncertain, such as death. The Court further ruled that a survivorship
agreement is per se not contrary to law and thus is valid unless its
operation or effect may be violative of a law such as in the following
instances: (1) it is used as a mere cloak to hide an inofficious donation; (2)
it is used to transfer property in fraud of creditors; or (3) it is used to defeat
the legitime of a compulsory heir. In the instant case, none of the foregoing
instances were present. Consequently, the Court upheld the validity of the
survivorship agreement entered into by the spouses Vitug. As such,
Romarico, being the surviving spouse, acquired a vested right over the
amounts under the savings account, which became his exclusive property
upon the death of his wife pursuant to the survivorship agreement. Thus,
the funds of the savings account are not conjugal partnership properties
and not part of the estate of the deceased Dolores.

BPI vs. IAC, 206 SCRA 408, February 21, 1992
(Bank; Negligence; Meticulous Care in treatment of accounts)
Facts: When the respondent spouses opened their joint current account,
the “new accounts” teller of the bank by mistake, placed the old existing
separate personal account number of Arthur Canlas on the deposit slip for
the new joint checking account of the spouses so that the initial deposit for
the joint checking account was miscredited to Arthur’s personal account .
Because of this, one of the checks issued by one of the spouse was
dishonoured for insufficient funds prompting private respondents to file a
complaint for damages against petitioner bank. Petitioner bank argues that
it is not considered negligent and liable for damages on account of the
inadvertence of its bank employee considered that it was an honest
mistake and not tainted with malice and bad faith.
Issue: WON the petitioner bank was guilty of gross negligence in the
handling of private respondents’ bank account.
Held: There is no merit in petitioner’s argument that it should not be
considered negligent, much less held liable for damages on account of the
inadvertence of its bank employee for Article 1173 of the Civil  Code
only requires it to exercise the diligence of a good father of a family.
As a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors
with meticulous care, always having in mind the fiduciary nature of their
relationship (Simex vs CA, 183 SCRA 360).
! Go vs. Intermediate Appellate Court G.R. No. L-68138
 awarded nominal damages instead of moral and exemplary damages.
May 31, 1991
“In quasi-delict cases, the defendant shall be liable for all damages
which are the natural and probable consequences of the act or omission
complained of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the defendant.”
Facts:
Floverto Jazmin, a visitor residing at Maravilla St. Mangatarem,
Pangasinan, is an American citizen and a retiree of the United States
Federal Government. Being a pensionado of the US Government, he
received annuity checks through Mangatarem Post Office and used to
encash it at the Prudential Bank Branch at Clark Air Base, Pampanga.
However, there was a time that he was not able to receive the checks
on time, thus prompted him to write a complaint due to the delay.
Thereafter he received a substitute check and encashed it at the
Prudential Bank.
Meanwhile, Agustin Go in his capacity as the manager of the Solidbank
(now Consolidated Bank and Trust Corporation), allowed a person, in
the name of Floverto Jasmin, to open a savings account thereby
depositing two US Treasury Checks. Deposited checks were sent to the
drawee bank (First National City Bank). Having no reply from the
drawee bank, the Solidbank allowed the depositor to withdraw the
amount indicated in the checks.

A year later, the two dollar checks were returned to Solidbank with the
notation that there was an alteration. With that, Jazmin received radio
messages requiring him to appear before the Philippine Constabulary
regarding the complaint filed by Go against him for estafa. It was then
found out that the depositor who withdrew the amount from Solidbank
was an impostor. Thus, Jazmin filed a case against Go at the CFI
Pangasinan for moral and exemplary damages.

The lower court ruled in favor of the plaintiff. Defendants appealed to
the IAC. Like the lower court, IAC ruled in favor of the plaintiff but
Thus, the case was elevated to the Supreme Court.
Issue:

Whether or not Go and the Solidbank are liable for nominal damages.
Ruling:

Yes, Go and the Solidbank are solidarily liable for nominal damages.
Under the law, quasi-delict cases are one of the sources of obligation.
In this case, the defendant shall be liable for all damages which are the
natural and probable consequences of the act or omission complained
of. It is not necessary that such damages have been foreseen or could
have reasonably been foreseen by the defendant. Go has the obligation
to pay nominal damages because of the Jazmin’s right being violated
and invaded in the case of estafa instituted at the Philippine
Constabulary. Nominal damages are awarded instead of moral and
exemplary damages
because Jazmin did not suffer any loss from the action made by the
plaintiff and such damages do not intend to indemnify any loss to the
latter. In fact, he was still able to receive the amount through the
substitute check sent to him. Therefore, Jazmin is not entitled to moral
damages and as well as exemplary damages. In the same way, the
bank is co-equally liable with Go because it has been grossly negligent,
through its employee, in handling the business transaction involved.
Firestone Tire vs. CA
Firestone Tire & rubber Co. vs. Court of Appeals
GR No. 113236 March 5, 2001
Quisumbing, J.:
Facts:
Forjas-Arca Enterprise Company is maintaining a special savings
account with Luzon Development Bank, the latter authorized and
allowed withdrawals of funds though the medium of special withdrawal
slips. These are supplied by Fojas-Arca. Fojas-Arca purchased on credit
with FirestoneTire & Rubber Company, in payment Fojas-Arca
delivered a 6 special withdrawal slips. In turn, these were deposited by
the Firsestone to its bank account in Citibank. With this, relying on such
confidence and belief Firestone extended to Fojas-Arca other purchase
on credit of its products but several withdrawal slips were dishonored
and not paid. As a consequence, Citibank debited the plaintiff’s account
representing the aggregate amount of the two dishonored special
withdrawal slips. Fojas-Arca averred that the pecuniary losses it suffered
are a caused by and directly attributes to defendant’s gross negligence as
a result Fojas-Arca filed a complaint.
Issue:
Whether or not the acceptance and payment of the special
withdrawal slips without the presentation of the depositor’s passbook
thereby giving the impression that it is a negotiable instrument like a
check.
Held:
No. Withdrawal slips in question were non negotiable
instrument. Hence, the rules governing the giving immediate notice of
dishonor of negotiable instrument do not apply. The essence of
negotiability which characterizes a negotiable paper as a credit
instrument lies in its freedom to circulate freely as a substitute for
money. The withdrawal slips in question lacked this character.
G.R. No. 97626, March 14, 1997
◦ The negligence must be the proximate cause of the loss
FACTS:
Rommel’s Marketing Corporation (RMC) maintained two separate
current accounts with PBC in connection with its business of
selling appliances. The RMC General Manager Lipana entrusted
to his secretary, Irene Yabut, RMC funds amounting to P300,000+
for the purpose of depositing the same to RMC’s account with
PBC. However, it turned out that Yabut deposited the amounts in
her husband’s account instead of RMC. Lipana never checked his
monthly statement of accounts regularly furnished by PBC so
that Yabut’s modus operandi went on for the span of more than
one year.
ISSUE:
◦ What is the proximate cause of the loss – Lipana’s
negligence in not checking his monthly statements or
the bank’s negligence through its teller in validating
the deposit slips?
HELD:
The bank teller was negligent in validating, officially stamping
and signing all the deposit slips prepared and presented by Yabut,
despite the glaring fact that the duplicate copy was not
completely accomplished contrary to the self-imposed procedure
of the bank with respect to the proper validation of deposit slips,
original or duplicate.
The bank teller’s negligence, as well as the negligence of the bank
in the selection and supervision of its bank teller, is the
proximate cause of the loss suffered by the private respondent,
not the latter’s entrusting cash to a dishonest employee. Xxx
Even if Yabut had the fraudulent intention to misappropriate the
funds, she would not have been able to deposit those funds in her
husband’s current account, and then make plaintiff believe that it
was in the latter’s accounts wherein she had deposited them, had
it not been for the bank teller’s aforesaid gross and reckless
negligence.
Doctrine of Last Clear Chance – where both parties are negligent,
but the negligent act of one is appreciably later in time than that of
the other, or when it is impossible to determine whose fault or
negligence should be attributed to the incident, the one who had the
last clear opportunity to avoid the impending harm and failed to do
so is chargeable with the consequences thereof. It means that the
antecedent negligence of a person does not preclude the recovery of
damages for the supervening negligence of, or bar a defense against
liability sought by another, if the latter, who had the last fair chance,
could have avoided the impending harm by exercise of due diligence.
(Phil. Bank of Commerce v. CA, supra)
Salvacion vs. Central Bank of the
Philippines (G.R. No. 94723. August
21, 1997)
16
APR
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and
Natural Guardian, and Spouses FEDERICO N. SALVACION, JR., and
EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION
and GREG BARTELLI y NORTHCOTT,respondents.
Ponente: TORRES, JR.
FACTS:
Respondent Greg Bartelli y Northcott, an American tourist, coaxed and lured the
12-year old petitioner Karen Salvacion to go with him in his apartment where the
former repeatedly raped latter. After the rescue, policemen recovered dollar and
peso checks including a foreign currency deposit from China Banking
Corporation (CBC). Writ of preliminary attachment and hold departure order were
issued. Notice of Garnishment was served by the Deputy Sheriff to CBC which
later invoked R.A. No. 1405 as its answer to it. Deputy Sheriff sent his reply to
CBC saying that the garnishment did not violate the secrecy of bank deposits
since the disclosure is merely incidental to a garnishment properly and legally
made by virtue of a court order which has placed the subject deposits in custodia
legis. CBC replied and invoked Section 113 of Central Bank Circular No. 960 to
the effect that the dollar deposits of Greg Bartelli are exempt from attachment,
garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body, whatsoever. Central Bank of the
Philippines affirmed the defense of CBC.
ISSUE:
Whether or not Sec. 113 of Central Bank Circular 960 and Sec. 8 of RA 6426
amended by PD 1246 otherwise known as the “Foreign Currency Deposit Act”
be made applicable to a foreign transient.
HELD:
NO. The provisions of Section 113 of CB Circular No. 960 and PD No. 1246,
insofar as it amends Section 8 of R.A. No. 6426 are hereby held to be
INAPPLICABLE to this case because of its peculiar circumstances.
RATIO:
[T]he application of the law depends on the extent of its justice. Eventually, if we
rule that the questioned Section 113 of Central Bank Circular No. 960 which
exempts from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body
whatsoever, is applicable to a foreign transient, injustice would result especially
to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would
negate Article 10 of the New Civil Code which provides that “in case of doubt in
the interpretation or application of laws, it is presumed that the lawmaking body
intended right and justice to prevail.
“Ninguno non deue enriquecerse tortizeramente con dano de otro.” Simply
stated, when the statute is silent or ambiguous, this is one of those fundamental
solutions that would respond to the vehement urge of conscience. It would be
unthinkable, that the questioned Section 113 of Central Bank No. 960 would be
used as a device by accused Greg Bartelli for wrongdoing, and in so doing,
acquitting the guilty at the expense of the innocent.
Call it what it may — but is there no conflict of legal policy here? Dollar against
Peso? Upholding the final and executory judgment of the lower court against the
Central Bank Circular protecting the foreign depositor? Shielding or protecting
the dollar deposit of a transient alien depositor against injustice to a national and
victim of a crime? This situation calls for fairness against legal tyranny.