Prudential Bank v. Heirs

JR., J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure , as amended, assailing the January 30, 2008 Decision1 and June 16, 2008 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 82908. The appellate court ruled that respondent Antonio S.A. Mauricio was illegally dismissed from employment by petitioner Prudential Bank. The antecedent facts of the case are as follows: Respondent Mauricio was hired by petitioner Prudential Bank on August 17, 1960.

He was the Branch Manager of Prudential Bank's Magallanes Branch in Makati City when he was dismissed from employment. On June 25, 1990, Spouses Marcelo and Corazon Cruz (Spouses Cruz) opened a dollar savings account, FXSD No. 221-6, with an initial cash deposit of US$500.00, in the Bank's Magallanes Branch. At that time, Mauricio was already its Branch Manager.

On July 17, 1990, Spouses Cruz executed in favor of the Bank a Deed of Real Estate Mortgage over their property covered by Transfer Certificate of Title No. 1310-R of the Register of Deeds of San Juan, Metro Manila. Later, the Spouses Cruz executed another Deed of Real Estate Mortgage over the same property in favor of the Bank for the amount of ₱600,000. On September 7, 1992, an audit investigation was conducted in the Magallanes Branch.

The salient portions of the reports3 of the audit team are summarized as follows: From March 1991 to August 1991, credits to FXSD No. 221-6 consisted mostly of dollar check deposits composed of U.S. Treasury Warrants (USTWs), U.S. Postal Money Orders, Travellers Express and Amexco Money Orders. Despite the fact that Spouses Cruz were not the payees of said instruments and neither of them endorsed the same, Mauricio allowed immediate withdrawals against them. Most of the proceeds of the encashments were then deposited to a peso savings account, S/A No. 3396, also in the name of the Spouses Cruz.

The dollar checks were eventually returned by their drawee banks for having forged endorsements, alterations to the stated amounts, or being drawn against insufficient funds, among other reasons. Allegedly, upon receipt of the returned checks at the Magallanes Branch, Mauricio debited FXSD No. 221-6, but such debits were made against the uncollected deposits of the Spouses Cruz. Some of the returned checks and USTWs were lodged to accounts receivable because the balance of FXSD No. 221-6 was not sufficient to cover the returned checks.

The other returned checks were then covered with the personal checks of the Spouses Cruz and their children. Said personal checks, however, were also returned by the drawee banks. According to the tellers, it was Mauricio who brings the checks to them with the prepared deposit slips for S/A No. 3396.

He also received the proceeds of the withdrawals and the difference between the total peso equivalent of the checks and the amount being deposited to S/A No. 3396. When the available teller's machine tapes from March 1 to August 30, 1991 were examined, it was shown that in some instances, cash-in validations on the deposits slips for S/A No. 3396 were effected by the tellers without actual receipt of cash at the time the validations were made. Simultaneously, cash withdrawals were allowed even if S/A No. 3396 did not have sufficient balance to cover the withdrawals at the time they were made.

The cash accountability of the tellers will balance only once the encashment of the USTWs were made later in the day. On October 16, 1992, Mauricio was directed to report for work at the Head Office immediately. On November 10, 1992, Prudential Bank President Jose L.

Santos issued a Memorandum4 dated November 9, 1992 to Mauricio furnishing him with a copy of the audit team's report and directing him to report in writing within seventy-two (72) hours from receipt of the memorandum why the bank should not institute an action against him. The report showed that the bank was exposed to losses amounting to $774,561.58, broken down as follows: 1. Returned $ checks deposited to FXSD 221-6 $344,600.00 2.

Returned $ checks encashed over the counter 3,190.58