G.R. No. 68138 - Go vs. Intermediate Appellate Court

The case involves a petition for review on certiorari questioning the propriety of the award of damages by the respondent appellate court.
Petitioners are Agustin Y. Go and the Consolidated Bank and Trust Corporation (formerly Solidbank). The respondent is Floverto Jazmin, a private respondent whose name was fraudulently used.
Floverto Jazmin is an American citizen, a retiree of the United States Federal Government, and a long-term visitor residing in the Philippines since 1972.

In April 1975, as branch manager of Solidbank in Baguio City, Agustin Go allowed a person identified as “Floverto Jazmin” to open Savings Account No. BG 5206.
The account opening involved the deposit of two U.S. treasury checks:

These checks, drawn on the First National City Bank, Manila, were payable to “Floverto Jasmin” with the address noted as Maranilla St., Mangatarem, Pangasinan, but the depositor’s record in the bank showed “Floverto Jazmin” with Maravilla St., Mangatarem, Pangasinan.
The depositor completed a standard new account information sheet, provided signature specimens, and the transaction was processed in the normal course of banking business.

After the checks were forwarded to the drawee bank for clearance and no response was received after three weeks, the bank allowed the withdrawal of the funds.
Over a year later, on June 29, 1976, the treasury checks were returned to the bank with indications that the amounts were altered.
Agustin Go, upon discovering the alterations, promptly reported the issue to the Philippine Constabulary in Baguio City.

On August 3, 1976, Jazmin received radio messages summoning him for investigation regarding a complaint of estafa by alteration of dollar checks.
Investigations were conducted by constabulary officers in both Lingayen, Pangasinan, and at Camp Holmes, La Trinidad, Benguet.
During the investigation, copies of the U.S. treasury checks were presented, and Jazmin denied being the depositor, denying his involvement in any fraudulent encashment or in opening an account with Solidbank.
The investigation eventually revealed that the person who deposited and encashed the checks under the name “Floverto Jazmin” was an impostor.

On September 24, 1976, Floverto Jazmin filed a complaint before the Court of First Instance of Pangasinan, alleging moral and exemplary damages amounting to P90,000 plus attorney's fees.
The complaint centered on:

The negligence of Agustin Go in failing to verify the depositor’s true identity despite clear discrepancies.
The reckless filing of a complaint for estafa against Jazmin, causing him humiliation, mental anguish, and inconvenience.
The alleged intention behind filing the complaint being to coerce Jazmin into paying the peso equivalent of the checks to the bank’s branch.

In its decision dated March 27, 1978, the lower court found Go negligent in not exercising greater care and vigilance. The court awarded:

Affirmed that Go’s negligence in failing to note the discrepancies was the proximate cause of the fraud.
Ruled that while there was a cause of action, the evidence supported only an award of nominal damages instead of moral or exemplary damages.
Awarded nominal damages of P3,000 and attorney's fees of P1,000, noting that no actual loss was proven and that the award was intended to vindicate Jazmin’s violated rights.

A motion for reconsideration by the petitioners was denied, leading to the present petition for review on certiorari.

The sequence of events indicates that the bank, through its employee Agustin Go, failed to exercise due diligence in verifying the depositor’s identity.
This negligence allowed an impostor to use Jazmin’s identity in a fraudulent transaction leading to altered treasury checks.
The ensuing criminal complaint and investigative procedures inflicted embarrassment, inconvenience, and mental anguish on Jazmin, despite these damages arising after the initial transaction.

Whether the negligence of the bank and its employee, Agustin Go, in verifying the depositor’s identity constitutes a proximate cause of the damages suffered by private respondent Floverto Jazmin.

The issue centers on whether the discrepancy in the depositor’s name and address should have alerted bank personnel and prevented the fraud.
It examines the standard of care expected in banking transactions and the failure to comply with such standards.

Whether the filing of the criminal complaint by Go—given that denouncing a crime is typically not a negligent act—can still give rise to an award of damages for mental anguish, moral shock, and social humiliation.

The consideration involves whether the resulting inconvenience and damage due to the complaint should attract liability despite the plaintiff not suffering an economic loss.
This issue addresses the appropriateness of awarding nominal damages when actual damages are not quantified.

Whether the employer bank can be held "co-equally liable" under Article 2180 of the Civil Code for the acts of its employee, in the absence of demonstrable negligence in selection and supervision.

The issue focuses on the application of vicarious liability to hold the bank accountable for its employee’s actions.
It questions the adequacy of the bank’s measures to prevent fraud and identify potential red flags in deposit transactions.

Whether the award of nominal damages is justified as a means to vindicate or recognize the private respondent’s violated legal rights, notwithstanding the absence of substantial or actual economic loss.