G.R. No. 186279 - Land Bank of the Philippines vs. San Juan, Jr.

On the morning of June 14, 2002, Bonsalagan approached the respondent, then Acting LBP Manager of the Binangonan Branch, with an intention to encash a check for P26 Billion.
The check was issued by China Banking Corporation (China Bank) – Greenhills-Ortigas Avenue Branch – and was drawn against an account purportedly belonging to CQ Ventures Corporation, with Bonsalagan as the payee.
Despite the unusually enormous amount, the check was initially confirmed by China Bank according to the respondent’s representation.

The respondent summoned two subordinate staff, Acsa Ramirez (Cashier/Operations Supervisor) and Leila Amparo (Teller/Designated New Accounts Clerk), to process Bonsalagan’s request for a partial withdrawal.
Ramirez raised a reservation based on bank policy that a check must first be cleared before any funds are withdrawn.
To accommodate the client, the respondent suggested that Bonsalagan open a current/checking account with the branch where the check would be deposited.
In opening the account, Bonsalagan submitted only one valid ID despite the requirement of two; the respondent nonetheless reassured Ramirez based on Bonsalagan’s multiple previous interactions with the bank.
Consequently, the respondent authenticated specimen signature cards and facilitated the issuance of a check booklet without waiting for the mandatory check clearing process.

The China Bank check was forwarded to LBP-Cainta Branch for clearance in the afternoon, as it was already past the cut-off time at Binangonan.
During the process, branch employees and officials exchanged calls:

Ramirez contacted the Cainta Branch to inform them about the incoming check and related certification from China Bank.
Florencio Quicoy, Jr., manager of LBP-Cainta, inquired whether the check had been reported to the Area Head Office.
Despite the respondent’s instruction to postpone the report until the next working day, Ramirez promptly called the Area Head Office, prompting further instructions including contacting China Bank for confirmation.

Later, the Area Head Office communicated through Carmencita Bayot to withhold the clearing of the check, and further directed the closure of Bonsalagan’s newly opened checking account.

Subsequent investigation by the bank revealed that the P26 Billion check was spurious and unfunded, with the account number not belonging to CQ Ventures Corporation but to other persons.
The Office of the Government Corporate Counsel (OGCC) charged the respondent with gross neglect of duty for:

Ordering the account opening without proper verification of the depositor’s identity.
Failing to confirm the genuineness and sufficiency of the check’s funds.
Issuing the check booklet prior to the actual clearance of the check.

As a result, the respondent was preventively suspended, and a Report of Investigation (October 21, 2004) recommended his dismissal.

The Land Bank of the Philippines (LBP) Board of Directors, in Resolution No. 04-394 (October 26, 2004), adopted the OGCC’s findings and approved the respondent’s dismissal.
The respondent’s motion for reconsideration was denied, which led him to appeal to the Civil Service Commission (CSC).
In CSC Resolution No. 060286 (February 15, 2006), the respondent was again found guilty of gross neglect of duty and was punished with dismissal, cancellation of eligibility, perpetual disqualification from re-employment in the government service, and forfeiture of retirement benefits.
The respondent then appealed to the Court of Appeals (CA) where, on October 17, 2007, the CA modified the finding to simple neglect of duty and imposed a penalty of six (6) months suspension.
The LBP moved for reconsideration of the CA’s decision, which was denied on February 5, 2009, prompting the LBP to file the petition for review on certiorari with the Supreme Court.

Whether the acts and omissions of the respondent, as Acting LBP Manager, constitute gross neglect of duty rather than simple neglect of duty.

Determining if the respondent’s failure to ensure strict compliance with bank policies amounted to a flagrant and palpable breach of duty.
Evaluating whether the respondent’s supervisory responsibility was so seriously neglected by allowing the bypass of proper procedures.

constitute gross negligence that justifies dismissal from service and imposition of accessory penalties.

The adequacy of the respondent’s exercise of duty in contrast with the fiduciary demands on bank officials handling public funds.