G.R. No. 112550 - Go vs. Court of Appeals

Case Summary (G.R. No. 112550)

Factual Background

NSC purchased two PNB manager’s checks: Check No. J-81-006142, dated May 11, 1982 in the amount of P911,981.00 (the first check), and Check No. J-81-00698, dated May 14, 1982 in the amount of P1,511,293.00 (the second check). Both checks carried the notation “For Payee’s Account” and were made payable to the Collector of Customs. An NSC official, Edmund Ulibarri, delivered the checks to LMC Brokerage Firm. As a result, the steel plates were released from the Bureau of Customs, and official receipts supposedly showing payment were delivered to NSC.

On May 31, 1982, the first check was deposited with SBTC at its Caloocan City Branch and credited on June 1, 1982 to Current Account No. 2110-0282-47, maintained by Robert Santos with SBTC’s Congressional Branch, Quezon City. This Congressional Branch account had been opened only the day before, on May 31, 1982. Subsequently, on June 21, 1982, another account—C/A No. 3310-0031-03—was opened in SBTC’s Caloocan City Branch in the name of Roberto Santos. On the same day, the second check was deposited in the Congressional Branch account C/A No. 2110-0282-47, but it was credited to the newly opened Caloocan City account C/A No. 3310-0031-03.

After deposit and clearing processes, withdrawals were made from the two accounts. NSC later learned that the official receipts issued for customs duties and taxes were fake, and NSC was required to pay customs duties again. In response to the resulting refund obligations, SBTC, after discovering the anomaly, paid PNB P2,352,966.00 as reimbursement for the proceeds of the two checks which PNB had to refund to NSC.

SBTC’s internal investigation allegedly revealed the participation of petitioner, together with co-accused Lauchengco and Fermin, in: (a) opening the Robert Santos accounts; (b) depositing the two subject checks in those accounts despite their being payable to the Collector of Customs; and (c) siphoning the proceeds. Two criminal informations for estafa through falsification of commercial documents were then filed against petitioner and the co-accused. At the same time, SBTC filed a civil complaint for sum of money against petitioner and several co-defendants, docketed as Civil Case No. Q-35744, and the criminal cases were tried jointly with the civil case.

Trial Court Disposition

The trial court acquitted petitioner Dick Go and his co-accused of estafa for failure of the prosecution to prove guilt beyond reasonable doubt. It also dismissed SBTC’s complaint for recovery of sum of money against petitioner and his co-defendants, as well as petitioner’s counterclaim.

Court of Appeals Ruling

On appeal, the Court of Appeals reversed and set aside the trial court’s decision. It affirmed most factual findings but made “corrections and deletions,” and then ordered petitioner and Eduardo Lauchengco to pay SBTC P1,307,811.62 with legal interest from September 7, 1982 until fully paid. The Court of Appeals also directed SBTC to return and/or release to petitioner all funds in its control under petitioner’s account, including accrued earnings, and it lifted and set aside attachments and/or garnishments issued by reason of the civil case.

In its explanation for reversing, the Court of Appeals traced the two PNB checks to deposits in accounts of one Robert Santos at SBTC’s Congressional Branch and Caloocan City Branch. It held that the Congressional Branch account (CA-2110-0282-47) was opened on May 31, 1982, with petitioner’s involvement, though petitioner claimed he met a “real live person” who was a walk-in client and not one and the same person as Robert Santos. The Court of Appeals found that another Robert Santos account (CA-3310-0031-03) in the Caloocan City Branch opened on June 21, 1982 involved Lauchengco’s intervention and that the checkbook delivered to petitioner enabled the diversion of the checks’ proceeds.

The Court of Appeals further considered an additional timeline it believed “completed the story,” including the deposit and clearing behavior between SBTC branches and the ensuing withdrawals and transfers, including deposits into other accounts such as one in the name of Fernando Cruz and other accounts involving parties not charged in the criminal cases. It ultimately concluded that petitioner initiated or participated in the opening of the Robert Santos accounts and that Robert Santos was a fictitious or inexistent person, thereby stripping petitioner’s denials of credibility.

Petitioner’s Errors and Appellate Issues Framed

In the petition for review, petitioner challenged the Court of Appeals for allegedly disregarding the trial court’s factual findings and reversing on conclusions unsupported by specific evidence. He also alleged legal error in allowing SBTC to recover amounts paid to PNB as reimbursement of the proceeds of the two checks placed in the Robert Santos accounts.

The Court treated the controlling inquiry as whether, based on the same factual findings, petitioner could be held civilly liable. It emphasized that while trial and appellate findings on facts generally bind and are not ordinarily reviewable, exceptions exist, including where the Court of Appeals makes findings contrary to admissions or to the trial court’s findings, or where appellate findings are grounded entirely on speculations or on a misapprehension of facts. It further anchored the analysis on the civil standard of preponderance of evidence, explaining that it refers to probability and the greater weight of credible evidence.

The Parties’ Contentions on Civil Liability

SBTC’s theory of civil liability in substance was that petitioner: first, took advantage of his position to facilitate opening Current Account No. 2110-0282-47 with knowledge that the account holder Robert Santos was inexistent; second and third, took advantage of his position in processing the deposit of PNB manager’s checks into the Robert Santos account, despite the checks being crossed and payable to the Collector of Customs; and fourth, appropriated the proceeds while knowing the checks represented government funds that SBTC could not accept for deposit due to a Central Bank prohibition.

The Court of Appeals’ civil-liability finding relied on two key factual propositions: that petitioner initiated the opening of the Robert Santos account(s), and that Robert Santos was fictitious or inexistent, implying that petitioner and Robert Santos were one and the same person. The Court of Appeals said this inference was supported by petitioner’s own cross-examination answers and by testimony from SBTC employees who claimed they never saw Robert Santos.

Legal Basis and Reasoning

The Court rejected the inferential leap used by the Court of Appeals. It held that petitioner’s alleged failure to get in touch with Robert Santos could not logically establish that Robert Santos was fictitious. It observed that testimony from clerks who never saw or spoke to Robert Santos only proved they had not met Robert Santos and did not prove non-existence. It further noted that SBTC’s investigation report indicated that Robert Santos existed, and it cited testimony from Ester Mendoza, SBTC’s Auditing Department manager, stating that petitioner admitted to her that he talked to Robert Santos.

The Court also examined the Court of Appeals’ reliance on documentary evidence to support involvement in account opening. It acknowledged that the trial court had found that documents identified by the witness contradicted her bare claims, but the Supreme Court held that the Court of Appeals’ “fictitious person” inference remained legally unsupported given the nature of the testimony and the documentary references that did not establish non-existence.

The Court likewise addressed SBTC’s allegations that petitioner caused the deposit and siphoning. Although the Court of Appeals had stated that petitioner’s involvement appeared “highly unusual and unexplainable,” the Supreme Court held that such characterization was unwarranted because petitioner’s participation in signing approvals and approving account documentation was consistent with his duties as assistant manager and was already acknowledged in the evidence. The Court observed that the processing irregularities in accepting and depositing checks payable to the Collector of Customs had been traced by the trial court to tellers who negligently and improperly accepted the checks.

Case Syllabus (G.R. No. 112550)

The petition sought review under Rule 45 of a Court of Appeals decision that reversed an RTC judgment in Civil Case No. Q-35744.
The RTC had dismissed SBTC’s civil complaint for recovery of sum of money against petitioner Dick Go and others, and it had also dismissed petitioner’s counterclaim.
The Court of Appeals reversed and ordered petitioner (and Eduardo Lauchengco) to pay jointly and severally SBTC PHP 1,307,811.62 with legal interest and to release funds and lift attachments, subject to the appellate dispositions stated in the decision.
The Supreme Court ultimately granted the petition and reinstated the RTC dismissal, while ordering SBTC to return and/or release to petitioner all funds in SBTC’s control under petitioner’s account, and to lift and set aside attachments and garnishments.

Parties and Procedural Posture

Petitioner was Dick L. Go, a bank officer, sued for civil liability arising from alleged involvement in a diversion scheme involving PNB Manager’s Checks.
Respondents included the Court of Appeals and Security Bank & Trust Company (SBTC), which filed the civil action for sum of money.
The dispute originated in RTC Branch 88 of Quezon City in Civil Case No. Q-35744, filed concurrently with related criminal informations for estafa through falsification of commercial documents.
The criminal cases and the civil case were tried jointly, but the RTC acquitted petitioner and his co-accused in the criminal cases and dismissed SBTC’s civil complaint.
The Court of Appeals reversed the RTC disposition in the civil case, prompting petitioner’s Rule 45 petition to the Supreme Court.
The Supreme Court stated that the controversy, on appeal, centered on whether the same factual findings could support civil liability under the required evidentiary threshold.

Key Factual Allegations

National Steel Corporation (NSC) purchased two Philippine National Bank (PNB) Manager’s Checks payable to the Collector of Customs as payment for customs duties and taxes due on NSC’s importation of steel plates.
Both PNB manager’s checks bore the notation “For Payee’s Account” and were issued to the Collector of Customs, but the scheme resulted in payment being effectively diverted.
An NSC official, Edmund Ulibarri, delivered the checks to the LMC Brokerage Firm, and the release of the goods from the Bureau of Customs allegedly followed upon submission of official receipts to NSC.
SBTC’s civil theory assumed that petitioner took advantage of his position to enable the opening of accounts in the name of a person allegedly inexistent and fictitious and to facilitate deposit and diversion of proceeds despite the checks’ “Collector of Customs” payee designation.
SBTC alleged petitioner’s participation in:
- facilitating the opening of Current Account No. 2110-0282-47 in SBTC Congressional Branch in the name of Robert Santos;
- processing deposits of the manager’s checks despite the checks’ payee designation;
- and siphoning or appropriating the proceeds despite knowledge that the checks involved government funds and were allegedly not acceptable for deposit under a Central Bank prohibition.
The factual record showed that:
- the first check was deposited on May 31, 1982 and credited on June 1, 1982 in an account maintained under Robert Santos at SBTC;
- the second check was deposited on June 21, 1982, with crediting shifted to a newly opened account in the SBTC Caloocan City Branch in the name of Roberto Santos (with account number C/A No. 3310-0031-03).
Withdrawals from the two Robert Santos accounts followed, and NSC later learned that the official receipts issued to it were fake, requiring NSC to pay customs duties a second time.
SBTC, after discovering the anomaly, paid PNB PHP 2,352,966.00 as reimbursement for the proceeds of the diverted checks, and SBTC pursued civil recovery from petitioner.

Trial Court Findings

The RTC found petitioner and co-accused not guilty beyond reasonable doubt for estafa through falsification of commercial documents, resulting in acquittal.
The RTC dismissed SBTC’s civil complaint for recovery of sum of money against petitioner and his co-defendants.
The RTC also dismissed petitioner’s counterclaim.
The case proceeded on the premise that the criminal acquittal did not necessarily preclude civil liability, but the RTC still found insufficient basis to impose the civil obligation sought by SBTC under the governing civil evidentiary standard.

Court of Appeals Reversal

The Court of Appeals reversed the RTC, while affirming the trial court’s factual findings in the main and then making “corrections and deletions” and adding certain “additional facts to complete the story.”
The Court of Appeals treated SBTC’s checks as having been traced to deposits into accounts of one Robert Santos at SBTC’s Congressional Branch and Caloocan City Branch.
The appellate court affirmed key temporal corrections, including:
- opening of the Congressional Branch account on May 31, 1982 (not May 3, 1982);
- opening of the Caloocan City Branch account on June 21, 1982 (not June 18 or earlier).
The Court of Appeals concluded that the involvement of petitioner was established through documentary and testimonial evidence, including:
- petitioner’s claimed “approval officer” role in signature card documentation;
- petitioner’s alleged approval of clearing and role in facilitating transfer of accounts;
- and testimony relating to alleged attempts to verify the existence of Robert Santos.
The Court of Appeals anchored its inference that Robert Santos was fictitious or inexistent on testimony that the witnesses had never seen o