PCIB v.

CA
Facts: This case is composed of three consolidated petitions involving several checks, payable to the Bureau of Internal Revenue, but was embezzled allegedly by an organized syndicate. I. G. R. Nos. 121413 and 121479 On October 19, 1977, plaintiff Ford issued a Citibank check amounting to P4,746,114.41 in favor of the Commissioner of Internal Revenue for the payment of manufacturers taxes. The check was deposited with defendant IBAA (now PCIB), subsequently cleared the the Central Bank, and paid by Citibank to IBAA. The proceeds never reached BIR, so plaintiff was compelled to make a second payment. Defendant refused to reimburse plaintiff, and so the latter filed a complaint. An investigation revealed that the check was recalled by Godofredo Rivera, the general ledger accountant of Ford, and was replaced by a managers check. Alleged members of a syndicate deposited the two managers checks with Pacific Banking Corporation. Ford filed a third party complaint against Rivera and PBC. The case against PBC was dismissed. The case against Rivera was likewise dismissed because summons could not be served. The trial court held Citibank and PCIB jointly and severally liable to Ford, but the Court of Appeals only held PCIB liable. II. G. R. No. 128604 Ford drew two checks in favor of the Commissioner of Internal Revenue, amounting to P5,851,706.37 and P6,311,591.73. Both are crossed checks payable to payees account only. The checks never reached BIR, so plaintiff was compelled to make second payments. Plaintiff instituted an action for recovery against PCIB and Citibank. On investigation of NBI, the modus operandi was discovered. Gorofredo Rivera made the checks but instead of delivering them to BIR, passed it to Castro, who was the manager of PCIB San Andres. Castro opened a checking account in the name of a fictitious person Reynaldo Reyes. Castro deposited a worthless Bank of America check with the same amount as that issued by Ford. While being routed to the Central Bank for clearing, the worthless check was replaced by the genuine one from Ford.

The trial court absolved PCIB and held Citibank liable, which decision was affirmed in toto by the Court of Appeals. Issues: (1) Whether there is contributory negligence on the part of Ford (2) Has petitioner Ford the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank) the value of the checks intended as payment to the Commissioner of Internal Revenue? Held: (2) The general rule is that if the master is injured by the negligence of a third person and by the concuring contributory negligence of his own servant or agent, the latter's negligence is imputed to his superior and will defeat the superior's action against the third person, asuming, of course that the contributory negligence was theproximate cause of the injury of which complaint is made. As defined, proximate cause is that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause produces the injury and without the result would not have occurred. It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate, in our view, their actions were not the proximate cause of encashing the checks payable to the CIR. The degree of Ford's negligence, if any, could not be characterized as the proximate cause of the injury to the parties. The mere fact that the forgery was committed by a drawer-payor's confidential employee or agent, who by virtue of his position had unusual facilities for perpertrating the fraud and imposing the forged paper upon the bank, does notentitle the bank toshift the loss to the drawerpayor, in the absence of some circumstance raising estoppel against the drawer. This rule likewise applies to the checks fraudulently negotiated or diverted by the confidential employees who hold them in their possession. (2) We have to scrutinize, separately, PCIBank's share of negligence when the syndicate achieved its ultimate agenda of stealing the proceeds of these checks. a. G. R. Nos. 121413 and 121479 On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of PCIBank employees to verify whether his letter requesting for the replacement of the Citibank Check No. SN-04867 was duly

authorized, showed lack of care and prudence required in the circumstances. Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the payor or its agent. It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank to which it is sent for collection is, in the absence of an argreement to the contrary, that of principal and agent. A bank which receives such paper for collection is the agent of the payee or holder. Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to scrutinize the check and to know its depositors before it could make the clearing indorsement "all prior indorsements and/or lack of indorsement guaranteed". Lastly, banking business requires that the one who first cashes and negotiates the check must take some precautions to learn whether or not it is genuine. And if the one cashing the check through indifference or other circumstance assists the forger in committing the fraud, he should not be permitted to retain the proceeds of the check from the drawee whose sole fault was that it did not discover the forgery or the defect in the title of the person negotiating the instrument before paying the check. For this reason, a bank which cashes a check drawn upon another bank, without requiring proof as to the identity of persons presenting it, or making inquiries with regard to them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to the hands of a third party. In such cases the drawee bank has a right to believe that the cashing bank (or the collecting bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the checks. Thus, one who encashed a check which had been forged or diverted and in turn received payment thereon from the drawee, is guilty of negligence which proximately contributed to the success of the fraud practiced on the drawee bank. The latter may recover from the holder the money paid on the check. b. G. R. No. 128604 In this case, there was no evidence presented confirming the conscious participation of PCIBank in the embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts and

declarations of its officers or agents within the course and scope of their employment. A bank will be held liable for the negligence of its officers or agents when acting within the course and scope of their employment. It may be liable for the tortuous acts of its officers even as regards that species of tort of which malice is an essential element. In this case, we find a situation where the PCIBank appears also to be the victim of the scheme hatched by a syndicate in which its own management employees had participated. But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone. Citibank failed to notice and verify the absence of the clearing stamps. For this reason, Citibank had indeed failed to perform what was incumbent upon it, which is to ensure that the amount of the checks should be paid only to its designated payee. The point is that 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. Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank and Citibank failed in their respective obligations and both were negligent in the selection and supervision of their employees resulting in the encashment of Citibank Check Nos. SN 10597 AND 16508. Thus, we are constrained to hold them equally liable for the loss of the proceeds of said checks issued by Ford in favor of the CIR.
GREGORIO GENOBIAGON, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents. Mario D. Ortiz for petitioner.

GRIO-AQUINO, J.: This is a petition for review of the Court of Appeals' decision in CA-G.R. No. 09949-CR, dated October 10, 1974, affirming the conviction of the petitioner of the crime of homicide thru reckless imprudence. As found by the Court of Appeals, the facts of this case are: On December 31,1959, at about 7:30 o'clock in the evening, a rig driven by appellant bumped an old woman who was crossing T. Padilla St., Cebu City, at the right side of T. Padilla Market. The appellant's rig was following another at a distance of two meters. The old woman started to cross when the first rig was approaching her, but as appellant's vehicle was going so fast not only because of the steep down-grade of the road, but also because he was trying to overtake the rig ahead of him, the

appellant's rig bumped the old woman, who as a consequence, fell at the middle of the road. The appellant continued to drive on, but a by-stander, one Vicente Mangyao, who just closed his store in market in order to celebrate the coming of the New Year, and who saw the incident right before him, shouted at the appellant to stop. He ran after appellant when the latter refused to stop. Overtaking the appellant, Mangyao asked him why he bumped the old woman and his answer was, 'it was the old woman that bumped him.' The appellant went back to the place where the old woman was struck by his rig. The old woman was unconscious, and the food and viands she was carrying were scattered on her body. The victim was then loaded in a jeep and brought to the hospital where she died three hours later (Exh. C). The findings after an autopsy are as follows: Contusion with Hematoma Left, Frontal and Occipito-Parietal Regionas Fracture Occipito-Parietal Bone Cerebral Hemorrhage. The deceased was an eighty-one-year old woman named Rita B. Cabrera. (pp. 3132, Rollo.) Petitioner was charged with homicide thru reckless imprudence in the Court of First Instance of Cebu (Crim. Case No. V7855). The trial court found petitioner guilty of the felony charged and sentenced him to "suffer an indeterminate penalty of three (3) months of arresto mayor as minimum to one (1) year, one (1) month and eleven (11) days of prision correccional as maximum, to indemnify the heirs of Rita Banzon Cabrera the sum of P6,000 with subsidiary imprisonment in case of insolvency, not to exceed 1/3 of the principal penalty and to pay the costs" (p. 3, Appellant's Brief, p. 56, Rollo). The petitioner appealed to the Court of Appeals (CA-G.R. 09949-CR)which,on October 10,1974,conviction of the accused but increased his civil liability to P12,000. The dispositive portion of its decision reads: WHEREFORE, finding no error in the judgment appealed from except in the amount of indemnity to be paid to the heirs of the deceased, Rita B. Cabrera, which is the sum of P6,000.00 with subsidiary imprisonment in case of insolvency which should be raised to P12,000.00 (People vs. Pantoja, G.R. No. L-18793, October 11, 1968, 25 SCRA 468) but without subsidiary imprisonment in case of insolvency, the same should be, as it is hereby affirmed in all other respects with costs. (P. 37, Rollo.) After his motion for reconsideration of the Court of Appeals' decision was denied, he filed a petition for review in this Court, alleging that the Court of Appeals erred: 1. in not finding that the reckless negligence of the victim was the proximate cause of the accident which led to her death; 2. in not acquitting the petitioner on the ground of reasonable doubt; and 3. in unjustly increasing the civil liability of the petitioner from P6,000.00 to P12,000.00, although the circumstances of the victim and the accused (petitioner) do not warrant such increase. It is quite evident that all the issues raised in the petition for review are factual. Well-entrenched in our jurisprudence is the rule that findings of fact of the trial court and the Court of Appeals are

binding upon us (Bernardo vs. Bernardo, 101 SCRA 351; Vda. De Roxas vs. IAC, 143 SCRA 77; Republic vs. IAC, 144 SCRA 705). The alleged contributory negligence of the victim, if any, does not exonerate the accused. "The defense of contributory negligence does not apply in criminal cases committed through reckless imprudence, since one cannot allege the negligence of another to evade the effects of his own negligence (People vs. Orbeta, CA-G.R. No. 321, March 29,1947)." (People vs. Quinones, 44 O.G. 1520). The petitioner's contention that the Court of Appeals unjustly increased his civil liability to P12,000, is devoid of merit. The prevailing jurisprudence in fact provides that indemnity for death in homicide or murder is P30,000 (People vs. De la Fuente, [1983]126 SCRA 518; People vs. Centeno, 130 SCRA 198). Accordingly, the civil liability of the petitioner is increased to P30,000. WHEREFORE, the appealed decision is affirmed with modification as to the civil liability of the petitioner which is hereby increased to P30,000. Costs against petitioner.

Santos vs pizardo In an Information dated April 25, 1994, Dionisio M. Sibayan (Sibayan) was charged with Reckless Imprudence Resulting to Multiple Homicide and Multiple Physical Injuries in connection with a vehicle collision between a southbound Viron Transit bus driven by Sibayan and a northbound Lite Ace Van, which claimed the lives of the vans driver and three (3) of its passengers, including a two-month old baby, and caused physical injuries to five (5) of the vans passengers. After trial, Sibayan was convicted and sentenced to suffer the penalty of imprisonment for