G.R. No.

L-60033 April 4, 1984

TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, a! TERESITA
SANTOS, petitioners,
vs.
T"E #IT$ FIS#AL OF MANILA, "ON. JOSE %. FLAMINIANO, ASST. #IT$ FIS#AL
FELI&AR'O N. LOTA a! #LEMENT 'A(I', respondents.
FACTS: This is a petition for prohibition and injunction with a prayer for the
immediate issuance of restraining order and/or writ of preiminary injunction !ed by
petitioners, the instant petition see"s to prohibit pubic respondents from proceeding
with the preiminary investigation, in which petitioners were charged by private
respondent Cement #avid, with estafa and vioation of Centra $an" Circuar %o.
&'( and reated reguations regarding foreign e)change transactions principay, on
the ground of ac" of jurisdiction in that the aegations of the charged, as we as the
testimony of private respondent*s principa witness and the evidence through said
witness, showed that petitioners* obigation is civi in nature.
+rivate respondent #avid !ed a compaint with the ,-ce of the City Fisca of .ania
charging petitioners with estafa and vioation of Centra $an" Circuar %o. &'( and
reated Centra $an" reguations on foreign e)change transactions. +rivate
respondent #avid, together with his sister, #enise /uhne, invested with the %ation
Savings and 0oan Association the sum of +1,1(2,2('.34 on time deposits covered by
$an"ers Acceptances and Certi!cates of Time #eposits and the sum of +1&,2&1.5(
on savings account deposits covered by passboo" nos. '6'&3 and 3567(3, or a tota
of +1,125,478.1( 9pp. 1261', roc.:. ;t appears further that private respondent #avid,
together with his sister, made investments in the aforesaid ban" in the amount of
<S=72,444.44. >hen the ban" was paced under receivership, petitioners ?uingona
and .artin, upon the re@uest of private respondent #avid, assumed the obigation of
the ban" to private respondent #avid by e)ecuting on Aune 17, 1581 a joint
promissory note in favor of private respondent ac"nowedging an indebtedness of
+,&&','1(.43 and <S=72,444.44. This promissory note was based on the statement
of account as of Aune &4, 1581 prepared by the private respondent. The amount of
indebtedness assumed appears to be bigger than the origina caim because of the
added interest and the incusion of other deposits of private respondent*s sister in
the amount of +11','1&.34. +etitioners ?uingona and .artin agreed to divide the
said indebtedness, and petitioner ?uingona e)ecuted another promissory note
antedated to Aune 17, 1581 whereby he personay ac"nowedged an indebtedness
of +''8,&47.41 91/3 of +1,&&','1(.43: and <S=&7,244.44 91/3 of <S=72,444.44: in
favor of private respondent. The promissory notes were e)ecuted as a resut of
deposits made by Cement #avid and #enise /uhne with the %ation Savings and
0oan Association.
;SS<B: >hether pubic respondents acted without jurisdiction when they
investigated the charges 9estafa and vioation of C$ Circuar %o. &'( and reated
reguations regarding foreign e)change transactions: subject matter of ;.S. %o. 816
&15&8.
C<0;%?: +ubic respondents have no jurisdiction over the charge of estafa. >hen
private respondent #avid invested his money on nine. and savings deposits with the
aforesaid ban", the contract that was perfected was a contract of simpe oan
or mutuum and not a contract of deposit. Thus, Artice 1584 of the %ew Civi Code
provides that:
Artice 1584. Fi)ed, savings, and current deposits of6money in ban"s and simiar
institutions sha be governed by the provisions concerning simpe oan.
Dence, the reationship between the private respondent and the %ation Savings and
0oan Association is that of creditor and debtorE conse@uenty, the ownership of the
amount deposited was transmitted to the $an" upon the perfection of the contract
and it can ma"e use of the amount deposited for its ban"ing operations, such as to
pay interests on deposits and to pay withdrawas. >hie the $an" has the obigation
to return the amount deposited, it has, however, no obigation to return or deiver
the same money that was deposited. And, the faiure of the $an" to return the
amount deposited wi not constitute estafa through misappropriation punishabe
under Artice &12, par. 9b: of the Cevised +ena Code, but it wi ony give rise to civi
iabiity over which the pubic respondents have no6 jurisdiction.
;n order that a person can be convicted under the above6@uoted provision, it must
be proven that he has the obligation to deliver or return the some money, goods or
personal property that he received +etitioners had no such obigation to return the
same money, i.e., the bis or coins, which they received from private respondents.
This is so because as ceary as stated in crimina compaints, the reated civi
compaints and the supporting sworn statements, the sums of money that
petitioners received were oans.
The nature of simpe oan is de!ned in Artices 15&& and 152& of the Civi Code.
FArt. 15&&. 6 $y the contract of oan, one of the parties deivers to another, either
something not consumabe so that the atter may use the same for a certain time6
and return it, in which case the contract is caed a commodatumE or money or other
consumable thing, upon the condition that the same amount of the same kind and
quality shall he paid in which case the contract is simply called a loan or mutuum.
FCommodatum is essentiay gratuitous.
FSimpe oan may be gratuitous or with a stipuation to pay interest.
F;n commodatum the baior retains the ownership of the thing loaned while in simple
loan, ownership passes to the borrower.
FArt. 152&. 6 A person who receives a oan of money or any other fungibe thing
ac@uires the ownership thereof, and is bound to pay to the creditor an e@ua amount
of the same "ind and @uaity.F
It can be readily noted from the above-quoted provisions that in simple loan
(mutuum), as contrasted to commodatum the borrower acquires ownership of the
money, goods or personal property borrowed Being the owner, the borrower can
dispose of the thing borrowed (rticle !"#, $ivil $ode) and his act will not be
considered misappropriation thereof% 9Gam vs. .ai", 5( SCCA &4, &( H1575IE
Bmphasis suppied:.
$ut even granting that the faiure of the ban" to pay the time and savings deposits
of private respondent #avid woud constitute a vioation of paragraph 19b: of Artice
&12 of the Cevised +ena Code, nevertheess any incipient crimina iabiity was
deemed avoided, because when the aforesaid ban" was paced under receivership
by the Centra $an", petitioners ?uingona and .artin assumed the obigation of the
ban" to private respondent #avid, thereby resuting in the novation of the origina
contractua obigation arising from deposit into a contract of oan and converting the
origina trust reation between the ban" and private respondent #avid into an
ordinary debtor6creditor reation between the petitioners and private respondent.
Conse@uenty, the faiure of the ban" or petitioners ?uingona and .artin to pay the
deposits of private respondent woud not constitute a breach of trust but woud
merey be a faiure to pay the obigation as a debtor.cha
G.R. No. 1)36*4-)6*
+B,+0B ,F TDB +D;0;++;%BS, +etitioners, vs. TBCBS; TA +<; ? and C,.B,
+,CCAS, Cespondent .
FACTS: The pet i t i oner s !ed before the CTC of ;oio 113 cases of Juai!ed Theft
against respondents Teresita +uig 9+uig: and Comeo +orras 9+orras: who were the
Cashier and $oo""eeper, respectivey, of private compainant Cura $an" of +ototan,
;nc for ta"ing various amounts of money with grave abuse of con!dence, and
without the "nowedge and consent of the ban", to the damage and prejudice of the
ban". The CTC dismissed the cases and refused to issue a warrant of arrest against
+uig and +orras on the ground of ac" of probabe cause because the compaint
faied to state the facts constituting the @uaifying circumstance of grave abuse of
con&dence and the eement of taking without the consent of the owner, since the
owner of the money is not the $an", but the depositors therein. .C was !ed but it
was aso denied.
;SS<B: >DBTDBC ,C %,T TDB 113 ;%F,C.AT;,%S F,C J<A0;F;B# TDBFT
S<FF;C;B%T0G A00B?B TDB B0B.B%T ,F TA/;%? >;TD,<T TDB C,%SB%T ,F TDB
,>%BC, A%# TDB J<A0;FG;%? C;CC<.STA%CB ,F ?CAKB A$<SB ,F C,%F;#B%CB.
C<0;%?: Ges. Juai!ed Theft, as de!ned and punished under Artice &14 of the
Cevised +ena Code, is committed as foows, vi':
craawACT. &14. (uali&ed )heft. The crime of theft sha be punished by the
penaties ne)t higher by two degrees than those respectivey speci!ed in the ne)t
preceding artice, if committed by a domestic servant, or with grave abuse of
con&dence, or if the property stoen is motor vehice, mai matter or arge catte or
consists of coconuts ta"en from the premises of a pantation, !sh ta"en from a
!shpond or !shery or if property is ta"en on the occasion of !re, earth@ua"e,
typhoon, vocanic eruption, or any other caamity, vehicuar accident or civi
disturbance. 9Bmphasis suppied.:

Theft, as de!ned in Artice &48 of the Cevised +ena Code, re@uires the physica
ta"ing of anothers property without vioence or intimidation against persons or force
upon things. The eements of the crime under this Artice are:

1. ;ntent to gainE
3. <nawfu ta"ingE
&. +ersona property beonging to anotherE
(. Absence of vioence or intimidation against persons or force upon things.

To fa under the crime of Juai!ed Theft, the foowing eements must concur:

1. Ta"ing of persona propertyE
3. That the said property beongs to anotherE
&. That the said ta"ing be done with intent to gainE
(. That it be done without the owners consentE
2. That it be accompished without the use of vioence or intimidation against
persons, nor of force upon thingsE
*. )hat it be done with grave abuse of con&dence.

,n the su-ciency of the ;nformation, Section ', Cue 114 of the Cues of Court
re@uires, inter alia, that the information must state the acts or omissions compained
of as constitutive of the oLense.

,n the manner of how the ;nformation shoud be worded, Section 5, Cue 114 of the
Cues of Court, is enightening:

Section 5. $ause of the accusation. The acts or omissions compained of as
constituting the oLense and the @uaifying and aggravating circumstances must be
stated in ordinary and concise anguage and not necessariy in the anguage used in
the statute but in terms su-cient to enabe a person of common understanding to
"now what oLense is being charged as we as its @uaifying and aggravating
circumstances and for the court to pronounce judgment.

;t is evident that the ;nformation need not use the e)act anguage of the statute in
aeging the acts or omissions compained of as constituting the oLense. The test is
whether it enabes a person of common understanding to "now the charge against
him, and the court to render judgment propery.
H2I

The portion of the ;nformation reevant to this discussion reads:

HAIbove6named HrespondentsI, conspiring, confederating, and heping one
another, with grave abuse of con&dence, being the $ashier and Bookkeeper of the
Cura $an" of +ototan, ;nc., +ototan, ;oio, without the "nowedge and/or consent of
the management of the $an" ) ) ).

;t is beyond doubt that teers, Cashiers, $oo""eepers and other empoyees of a
$an" who come into possession of the monies deposited therein enjoy the
con!dence reposed in them by their empoyer. $an"s, on the other hand, where
monies are deposited, are considered the owners thereof. This is very cear not ony
from the e)press provisions of the aw, but from estabished jurisprudence. The
reationship between ban"s and depositors has been hed to be that of creditor and
debtor. Artices 152& and 1584 of the %ew Civi Code, as appropriatey pointed out
by petitioner, provide as foows:

Artice 152&. A person who receives a oan of money or any other fungibe thing
ac@uires the ownership thereof, and is bound to pay to the creditor an e@ua amount
of the same "ind and @uaity.

Artice 1584. Fi)ed, savings, and current deposits of money in ban"s and simiar
institutions sha be governed by the provisions concerning oan.

;n a ong ine of cases invoving Juai!ed Theft, this Court has !rmy estabished the
nature of possession by the $an" of the money deposits therein, and the duties
being performed by its empoyees who have custody of the money or have come
into possession of it. The Court has consistenty considered the aegations in the
;nformation that such empoyees acted with grave abuse of con!dence, to the
damage and prejudice of the $an", without particuary referring to it as owner of the
money deposits, as su-cient to ma"e out a case of Juai!ed Theft
>here the ;nformations merey aeged the positions of the respondentsE that the
crime was committed with grave abuse of con!dence, with intent to gain and
without the "nowedge and consent of the $an", without necessariy stating the
phrase being assiduousy insisted upon by respondents, of a relation by reason of
dependence, guardianship or vigilance, between the respondents and the o+ended
party that has created a high degree of con&dence between them, which
respondents abused,
,-!.
and without empoying the word owner in ieu of the $an"
were considered to have satis!ed the test of su-ciency of aegations.

As regards the respondents who were empoyed as Cashier and $oo""eeper of the
$an" in this case, there is even no reason to @uibbe on the aegation in the
;nformations that they acted with grave abuse of con!dence. ;n fact, the ;nformation
which aeged grave abuse of con!dence by accused herein is even more precise, as
this is e)acty the re@uirement of the aw in @uaifying the crime of Theft.

;n summary, the $an" ac@uires ownership of the money deposited by its cientsE and
the empoyees of the $an", who are entrusted with the possession of money of the
$an" due to the con!dence reposed in them, occupy positions of con!dence. The
;nformations, therefore, su-cienty aege a the essentia eements constituting the
crime of Juai!ed Theft.
G.R. No. 84+81 Ma, +), 1994
#IT$TRUST %AN-ING #OR.ORATION, /etitioner, vs. T"E INTERME'IATE A..ELLATE
#OURT a! EMME "ERRERO, 0espondents.
FACTS: +rivate respondent Bmme Derrero !ed a compaint for damages against
petitioner Citytrust $an"ing Corporation. ;n her compaint, private respondent averred
that she, a businesswoman, made reguar deposits, starting September of 1575, with
petitioner Citytrust $an"ing Corporation. She deposited with petitioner the amount of
Thirty ,ne Thousand Five Dundred +esos 9+&1,244.44:, in cash, in order to ampy cover si)
9': postdated chec"s she issued. >hen presented for encashment upon maturity, a the
chec"s were dishonored due to Finsu-cient funds.F The ast chec" %o. 447(44, however,
was personay redeemed by private respondent in cash before it coud be redeposited.
+etitioner, in its answer, asserted that it was due to private respondent*s faut that her
chec"s were dishonored. ;t averred that instead of stating her correct account number,
i.e., 3544483&, in her deposit sip, she inaccuratey wrote 354483&. The Cegiona Tria
Court dismissed the compaint for ac" of merit. +rivate respondent went to the Court of
Appeas, which found the appea meritorious. Dence, it rendered judgment reversing the
tria court*s decision.
;SS<B: >hether or not the ban" is iabe for damages.
C<0;%?: Ges. +rivate respondent is entited to nomina damages. ;n 1ime2 International
(3anila), Inc. vs. $ourt of ppeals, 18& SCCA &'4, reiterated in Bank of /hilippine Islands
vs. Intermediate ppellate $ourt, 34' SCCA (48, we simiary said, in cautioning
depository ban"s on their !duciary responsibiity, that 6
;n every case, the depositor e)pects the ban" to treat his account with utmost !deity,
whether such account consists ony of a few hundred pesos or of miions. The ban" must
record every singe transaction accuratey, down to the ast centavo, and as prompty as
possibe. This has to be done if the account is to reMect at any given time the amount of
money the depositor can dispose of as he sees !t, con!dent that the ban" wi deiver it as
and to whomever he directs. A bunder on the part of the ban", such as the dishonor of a
chec" without good reason, can cause the depositor not a itte embarrassment if not aso
!nancia oss and perhaps even civi and crimina itigation.
The point is that as a business aLected with pubic interest and because of the nature of
its functions, the ban" is under obigation to treat the accounts of its depositors with
meticuous care, aways having in mind the !duciary nature of their reationship.
>e agree with petitioner, however, that it is wrong to award, aong with nomina damages,
temperate or moderate damages. The two awards are incompatibe and cannot be
granted concurrenty. %omina damages are given in order that a right of the paintiL,
which has been vioated or invaded by the defendant, may be vindicated or recogniNed,
and not for the purpose of indemnifying the paintiL for any oss suLered by him 9Art.
3331, %ew Civi CodeE 3anila Banking $orp. vs. Intermediate ppellate $ourt, 1&1 SCCA
371:. Temperate or moderate damages, which are more than nomina but ess than
compensatory damages, on the other hand, may be recovered when the court !nds that
some pecuniary oss has been suLered but its amount cannot, from the nature of the
case, be proved with reasonabe certainty 9Art. 333(, %ew Civi Code:.c
/G.R. No. 9)6+6. Mar01 14, 199)2
."ILI..INE %AN- OF #OMMER#E, o3 a45or46! 4, ."ILI..INE #OMMER#IAL
INTERNATIONAL %AN-, ROGELIO LA#SON, 'IGNA 'E LEON, MARIA ANGELITA
.AS#UAL, et al., Petitioners, v. T"E #OURT OF A..EALS, ROMMEL7S MAR-ETING
#OR.., r6pr65686! 4, ROMEO LI.ANA, i85 .r65i!68 9 G66ral Maa:6r,
Respondents.
FACTS: A compaint !ed by the private respondent Comme*s .ar"eting Corporation
9C.C for brevity:, represented by its +resident and ?enera .anager Comeo 0ipana, to
recover from the former +hiippine $an" of Commerce 9+$C for brevity:, now absorbed by
the +hiippine Commercia ;nternationa $an", the sum of +&4(,575.7( representing
various deposits it had made in its current account with said ban" but which were not
credited to its account, and were instead deposited to the account of one $ienvenido
Cotas, aegedy due to the gross and ine)cusabe negigence of the petitioner ban". C.C
maintained two 93: separate current accounts, Current Account %os. 2&6415846& and 2&6
417(867, with the +asig $ranch of +$C in connection with its business of seing
appiances.
+etitioner Comeo 0ipana caims to have entrusted C.C funds in the form of cash
totaing +&4(,575.7( to his secretary, ;rene Gabut, for the purpose of depositing said
funds in the current accounts of C.C with +$C. ;t turned out, however, that these
deposits, on a occasions, were not credited to C.C*s account but were instead deposited
to Account %o. 2&6417&(67 of Gabut*s husband, $ienvenido Cotas who i"ewise maintains
an account with the same ban". #uring this period, petitioner ban" had, however, been
reguary furnishing private respondent with monthy statements showing its current
accounts baances. <nfortunatey, it had never been the practice of Comeo 0ipana to
chec" these monthy statements of account reposing compete trust and con!dence on
petitioner ban".
;rene Gabut*s modus operandi is far from compicated. She woud accompish two 93:
copies of the deposit sip, an origina and a dupicate. The origina showed the name of her
husband as depositor and his current account number. ,n the dupicate copy was written
the account number of her husband but the name of the account hoder was eft ban".
+$C*s teer, ANucena .abayad, woud, however, vaidate and stamp both the origina and
the dupicate of these deposit sips retaining ony the origina copy despite the ac" of
information on the dupicate sip. The second copy was "ept by ;rene Gabut aegedy for
record purposes. After vaidation, Gabut woud then ! up the name of C.C in the space
eft ban" in the dupicate copy and change the account number written thereon, which is
that of her husband*s, and ma"e it appear to be C.C*s account number, i.e., C.A. %o. 2&6
415846&. >ith the daiy remittance records aso prepared by .s. Gabut and submitted to
private respondent C.C together with the vaidated dupicate sips with the atter*s name
and account number, she made her company beieve that a the whie the amounts she
deposited were being credited to its account when, in truth and in fact, they were being
deposited by her and credited by the petitioner ban" in the account of Cotas. This went on
in a span of more than one 91: year without private respondent*s "nowedge. <pon
discovery of the oss of its funds, C.C demanded from petitioner ban" the return of its
money, but as its demand went unheeded. The tria court found petitioner ban" negigent
and ordered to pay private respondentOs ost deposits pus damages. ,n appea, CA
modi!ed the decision of the CTC deeting the award for damages.
+etitioners submit that the pro)imate cause of the oss is the negigence of respondent
C.C and Comeo 0ipana in entrusting cash to a dishonest empoyee in the person of .s.
;rene Gabut.
2
According to them, it was impossibe for the ban" to "now that the money
deposited by .s. ;rene Gabut beong to C.CE neither was the ban" forewarned by C.C
that Gabut wi be depositing cash to its account. Thus, it was impossibe for the ban" to
"now the frauduent design of Gabut considering that her husband, $ienvenido Cotas, aso
maintained an account with the ban" For the ban" to in@uire into the ownership of the
cash deposited by .s. ;rene Gabut woud be irreguar. ,therwise stated, it was C.C*s
negigence in entrusting cash to a dishonest empoyee which provided .s. ;rene Gabut the
opportunity to defraud C.C.
+rivate respondent, on the other hand, maintains that the pro)imate cause of the oss was
the negigent act of the ban", thru its teer .s. ANucena .abayad, in vaidating the
deposit sips, both origina and dupicate, presented by .s. Gabut to .s. .abayad,
notwithstanding the fact that one of the deposit sips was not competey accompished.
;SS<B: >hether or not there is negigence on the part of the ban" and therefore iabe for
damages.
C<0;%?: Ges, $an" is negigent and iabe for damages. ;t appears that the ban"*s teer,
.s. ANucena .abayad, was negigent in vaidating, o-ciay stamping and signing a the
deposit sips prepared and presented by .s. Gabut, despite the garing fact that the
dupicate copy was not competey accompished contrary to the sef6imposed procedure
of the ban" with respect to the proper vaidation of deposit sips, origina or dupicate, as
testi!ed to by .s. .abayad hersef. .s. .abayad faied to observe this very important
procedure. The fact that the dupicate sip was not compusoriy re@uired by the ban" in
accepting deposits shoud not reieve the petitioner ban" of responsibiity. The odd
circumstance aone that such dupicate copy ac"ed one vita information 66 that of the
name of the account hoder 66 shoud have aready put .s. .abayad on guard. Cather
than readiy vaidating the incompete dupicate copy, she shoud have proceeded more
cautiousy by being more probing as to the true reason why the name of the account
hoder in the dupicate sip was eft ban" whie that in the origina was !ed up. She
shoud not have been so naive in accepting hoo", ine and sin"er the too shaow e)cuse of
.s. ;rene Gabut to the eLect that since the dupicate copy was ony for her persona
record, she woud simpy ! up the ban" space ater on. A Freasonabe man of ordinary
prudenceF woud not have given credence to such e)panation and woud have insisted
that the space eft ban" be !ed up as a condition for vaidation. <nfortunatey, this was
not how ban" teer .abayad proceeded thus resuting in huge osses to the private
respondent. %egigence here ies not ony on the part of .s. .abayad but aso on the part
of the ban" itsef in its ac"adaisica seection and supervision of .s. .abayad. This was
e)empi!ed in the testimony of .r. Comeo $onifacio, then .anager of the +asig $ranch of
the petitioner ban" and now its Kice6+resident, to the eLect that, whie he ordered the
investigation of the incident, he never came to "now that ban" deposit sips were
vaidated in tota disregard of the ban"*s vaidation procedures.
At this juncture, it is worth to discuss the degree of diigence ought to be e)ercised by
ban"s in deaing with their cients.
The %ew Civi Code provides:
FACT. 117&. The faut or negigence of the obigor consists in the omission of that diigence
which is re@uired by the nature of the obigation and corresponds with the circumstances
of the persons, of the time and of the pace. >hen negigence shows bad faith, the
provisions of artices 1171 and 3341, paragraph 3, sha appy.
;f the aw or contract does not state the diigence which is to be observed in the
performance, that which is e)pected of a good father of a family sha be re@uired.
9114(a:F
;n the case of ban"s, however, the degree of diigence re@uired is more than that of
a good father of a family. Considering the !duciary nature of their reationship with their
depositors, ban"s are duty bound to treat the accounts of their cients with the highest
degree of care.
As eucidated in 1ime2 International (3anila), Inc. v. $ourt of ppeals,
33
in every case, the
depositor e)pects the ban" to treat his account with the utmost !deity, whether such
account consists ony of a few hundred pesos or of miions. The ban" must record every
singe transaction accuratey, down to the ast centavo, and as prompty as possibe. This
has to be done if the account is to reMect at any given time the amount of money the
depositor can dispose as he sees !t, con!dent that the ban" wi deiver it as and to
whomever he directs. A bunder on the part of the ban", such as the faiure to duy credit
him his deposits as soon as they are made, can cause the depositor not a itte
embarrassment if not !nancia oss and perhaps even civi and crimina itigation.
The point is that as a business aLected with pubic interest and because of the nature of
its functions, the ban" is under obigation to treat the accounts of its depositors with
meticuous care, aways having in mind the !duciary nature of their reationship. ;n the
case before us, it is apparent that the petitioner ban" was remiss in that duty and vioated
that reationship.
G.R. No. 1))*+6
."ILI..INE SA(INGS %AN-,
+etitioner- versus - #"O;-ING FOO'
#OR.ORATION,
FACTS: Aoe /uan Food Corporation issued in favor of Chow"ing !ve 92: +S$an"
chec"s. The tota amount of the subject chec"s reached +22',581.8'. ,n the
respective due dates of each chec", Chow"ings acting accounting manager, Cino T.
.anNano, endorsed and encashed said chec"s with the $ustos branch of respondent
+S$an". A the !ve chec"s were honored by defendant Santos, even with ony the
endorsement of .anNano approving them. The signatures of the other authoriNed
o-cers of respondent corporation were absent in the !ve 92: chec"s, contrary to
usua ban"ing practice. <ne)pectedy, .anNano absconded with and
misappropriated the chec" proceeds. >hen Chow"ing found out .anNanos scheme,
it demanded reimbursement from +S$an". >hen +S$an" refused to pay, Chow"ing
!ed a compaint for a sum of money with damages before the CTC.
;n its Answer, petitioner did not controvert the foregoing facts, but denied iabiity to
respondent for the encashed chec"s. +etitioner ban" maintained it e)ercised due
diigence in the supervision of a its empoyees. ;t even dismissed
defendant Santos after she was found guity of negigence in the performance of her
duties. #efendant Santos, on the other hand, denied that she had been negigent in
her job. She averred that she merey foowed the ban"s practice of honoring
respondents chec"s even if accompanied ony by .anNanos endorsement.
#efendant Abacan i"ewise denied any iabiity to respondent. De aeged that, as
president and o-cer of petitioner ban", he payed no roe in the transactions
compained of. Thus, respondent has no cause of action against him.

+etitioner, Santos and Abacan were unanimous in asserting that respondent is
estopped from caiming reimbursement and damages since it was negigent in
aowing .anNano to ta"e hod, endorse, and encash its chec"s. +etitioner pointed
out that the pro)imate cause of respondents oss was its own negigence.
CTC rendered judgment in favor of respondent. +etitioner !ed a motion for
reconsideration. CTC reversed its earier ruing and hed that it was respondents own
negigence that was the pro)imate cause of the oss. ,n appea, CA hed that both
petitioner +S$an" and Santos shoud bear the oss.
;SS<B: >hether or not the ban" observed the diigence of a good father of the
famiy.
C<0;%?: %o, .68i8io6r <ail6! 8o pro=6 81a8 i8 1a5 o456r=6! 816 !>6 !ili:606
r6?>ir6! o< 4a@5 >!6r 816 la3. ;t cannot be over emphasiNed that the ban"ing
business is impressed with pubic interest. ,f paramount importance is the trust and
con!dence of the pubic in genera in the ban"ing industry. Conse@uenty, the
diigence re@uired of ban"s is more than that of a Coman pater familias or a good
father of a famiy. The highest degree of diigence is e)pected.

;n its decaration of poicy, the ?enera $an"ing 0aw of 3444re@uires of ban"s the
highest standards of integrity and performance. %eedess to say, a ban" is under
obigation to treat the accounts of its depositors with meticuous care. The !duciary
nature of the reationship between the ban" and the depositors must aways be of
paramount concern.

+etitioner, through Santos, was ceary negigent when it honored respondents
chec"s with the one endorsement of.anNano. ;n the simiar case of /hilippine Bank
of $ommerce v. $ourt of ppeals, an empoyee of Commes .ar"eting Corporation
9C.C: was abe to iegay deposit in a diLerent account the chec"s of the
corporation. This Court found that it was the ban" teers faiure to e)ercise
e)traordinary diigence to vaidate the deposit sips that caused the crime to be
perpetrated.

+ro)imate cause is determined by the facts of the case. ;t is that cause which, in
natura and continuous se@uence, unbro"en by any e-cient intervening cause,
produces the injury, and without which the resut woud not have occurred.
H(4I

.easured by the foregoing yardstic", the pro)imate cause of the oss is not
respondents aeged negigence in aowing .anNano to ta"e hod and encash
respondents chec"s. The pro)imate cause is petitioners own negigence in the
supervision of its empoyees when it overoo"ed the irreguar practice of encashing
chec"s even without the re@uisite endorsements.