SECOND DIVISION

[G.R. No. 153784. October 25, 2005.]

ROMEO C. CADIZ, CARLITO BONGKINGKI and PRISCO GLORIA IV ,

petitioners, vs . COURT OF APPEALS, and PHILIPPINE COMMERCIAL
INTERNATIONAL BANK (Now EQUITABLE PCIBANK) , respondents.

DECISION

TINGA , J : p

Employees who abuse their position for duciary gain cannot be shielded from the
consequences of their wrongdoing even on account of the bank's operational laxities that
may have provided the gateway for their shenanigans. Their misconduct provides the bank
with cause for the termination of their employment.
The facts follow.
Petitioners Romeo Cadiz ("Cadiz"), Carlito Bongkingki ("Bongkingki") and Prisco
Gloria IV ("Gloria") were employed as signature veri er, bookkeeper, and foreign currency
denomination clerk/bookkeeper-reliever, respectively, in the main o ce branch (MOB) of
Philippine Commercial International Bank (respondent bank).
The anomalies in question arose when Rosalina B. Alqueza (Alqueza) led a
complaint with PCIB for the alleged non-receipt of a Six Hundred Dollar ($600.00) demand
draft drawn against it which was purchased by her husband from Hongkong and Shanghai
Banking Corporation. Upon veri cation, it was uncovered that the demand draft was
deposited on 10 June 1988 with FCDU Savings Account (S/A) No. 1083-4, an account
under the name of Sonia Al scar (Al scar). Further investigation revealed that the demand
draft, together with four (4) other checks, was made to appear as only one deposit
covered by HSBC Check No. 979120 for One Thousand Two Hundred Thirty-two Dollars
(US$1,232.00).
The Branch Manager, Ismael R. Sandig, then presided over a series of meetings,
wherein Cadiz, Bongkingki and Gloria allegedly verbally admitted their participation in a
scheme to divert funds intended for other accounts using the Savings Account of Al scar.
Subsequently, Cadiz allegedly paid Alqueza P12,690.00, the peso equivalent of US$600,
but insisted that the corresponding receipt be issued in Alfiscar' s name instead.
On account of these allegations, a special audit examination was conducted by the
bank. On 31 January 1989, the internal auditors of the bank, headed by Lizza G. Baylon,
submitted their ndings in an o cial report. The auditors determined that as early as July
1987, petitioner Cadiz had reserved the savings account in the name of Sonia Al scar. The
account was opened on 27 November 1987 and closed on 23 June 1988. Twenty- ve (25)
deposit slips involving the account were posted by Bongkingki while sixteen (16) deposit
slips were posted by Gloria. A veri cation of the deposit slips yielded ndings of
miscoded checks, forged signatures, non-validation of deposit slips by the tellers,
wrongful deposit of second-endorsed checks into foreign currency deposit accounts, the
deposit slips which do not bear the required approval of bank o cers, and withdrawals
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 made either on the day of deposit or the following banking day. 1
In view of such ndings, show-cause memoranda 2 were served on petitioners,
requiring them to explain within seventy-two (72) hours why no disciplinary action should
be taken against them in connection with the results of the special audit examination. On
22 March 1989, petitioners submitted their written explanations. 3 Not satis ed with their
explanations, respondent bank in memoranda 4 all dated 22 June 1989 dismissed
petitioners from employment for violation of Article III Section 1 B-2 and Article III Section
1-C of the Code of Discipline. aASDTE

Petitioners lodged a complaint before the labor arbiter for illegal dismissal on 18
September 1989. Labor Arbiter Ernesto S. Dinopol adjudged that petitioners were illegally
dismissed and ordered their reinstatement and payment of backwages. This conclusion
was based on the notices of dismissal, which, to the mind of the labor arbiter, was
couched in general terms and without explaining how the rules were violated. The labor
arbiter also attributed petitioners' acts in fraudulently coding several deposit slips as
"1511" (immediately withdrawable) as mere procedural inadequacies, with the fault
attributable to respondent bank for its laxity. 5
The labor arbiter's Decision was reversed on appeal before the Second Division of
the National Labor Relations Commission (NLRC), which, in a Decision 6 dated 30 June
1994, ordered the dismissal of the petition. In doing so, the NLRC departed from the labor
arbiter's nding of facts and concluded that petitioners were dismissed for just cause.
Dismissing petitioners' appeal, the Court of Appeals Ninth Division similarly determined on
the basis of substantial evidence that petitioners were validly terminated in its own
Decision 7 dated 13 July 2001.
After the appellate court denied petitioner's motion for reconsideration, the matter
was brought before this Court in a Petition for Review on Certiorari. 8
The issues to be resolved are whether the Court of Appeals erred in not sustaining
the ndings of the labor arbiter and upholding those of the NLRC and whether the Court of
Appeals erred in dismissing the petition by ignoring petitioners' claims that they were
dismissed without just cause and due process. 9
In its Comment, 1 0 respondent bank seeks to have the petition dismissed inasmuch
as all the issues raised herein involve questions of fact. We note that as a general rule, only
questions of law may be brought upon this Court in a petition for review on certiorari under
Rule 45 of the Rules of Court. This Court is not a trier of facts, and as such is tasked to
calibrate and assess the probative weight of evidence adduced by the parties during trial
all over again. 1 1
However, if there are competing factual ndings by the different triers of fact, such
as those made in this case by the labor arbiter on one hand, and those of the NLRC and
Court of Appeals on the other hand, this Court is compelled to go over the records of the
case, as well as the submissions of the parties, and resolve the factual issues. 1 2 With this
in mind, we shall now proceed to examine the decisions under review.
The general thesis as laid down by the NLRC and Court of Appeals is that petitioners
had surreptitiously diverted funds deposited by depositors to S/A No. 1083-4 which was
under their control and disposition. On the other hand, a perusal of the labor arbiter's
Decision reveals a different perspective from which the case was approached. While the
labor arbiter conceded that petitioners Bongkingki and Gloria had miscoded several
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 deposit slips, rendering them immediately withdrawable, he characterized the errors as
"mere procedural inadequacies" which were preventable had management exercised
greater control over its employees. 1 3
Far from petitioners' thrust, the miscoding of deposit slips cannot be downplayed
as "mere procedural inadequacies." After all, it is such miscoding that precipitated the
fraudulent withdrawals in the rst place. The act operated as the rst indispensable step
towards the commission of fraud on the bank.
More disturbing though is the labor arbiter's willingness to acquit petitioners of
culpability on account of the purported negligence of the bank. It is similar to concluding
that the bank guards, and not the burglars, bear primary culpability for a bank robbery.
Whatever liability or responsibility was expected of the bank stands as an issue separate
from the liability of the recreant bank employees. Even assuming that the bank observed
less-than-ideal controls over the security of its operations, such laxity does not serve as
the carte blanche signal for the bank employees to take advantage of safeguard control
lapses and perpetrate chicanery on their employer.
The labor arbiter also evaluated the bank's claim that Cadiz had reimbursed the
amount of $600 to the aggrieved depositor Alqueza while making it appear that it was
Al scar who had actually made the refund. In disbelieving this claim, the Labor Arbiter
concluded that "it is unthinkable for a lowly bank employee to impose his will upon his high
and mighty employer." 1 4
This pronouncement is revelatory of absurd logic. The notion that a lowly employee
will never countermand the will or interests of the employer is su ciently rebutted by any
labor law casebook, any omnibus of our labor jurisprudence, and the evolution of the
human experience that disquiets persons from unhesitatingly acceding to the presumptive
good faith of others. It is an accepted premise of life and jurisprudence that persons are
capable, upon impure motivations, of taking advantage of others, whether their social
lessers, equals, or betters. The necessity of punishment arises from this aw of human
nature. This philosophic stance of the labor arbiter actually obviates the nature of sin.
Obviously, we are hard-pressed to accord high regard to the labor arbiter's
discernment as a trier of facts. Nonetheless, his claim that there were procedural aws
attending the dismissal of petitioners warrants some deliberation.
The labor arbiter ruled that the notices of dismissal served on petitioners was
insu cient as it failed to speci cally delineate how petitioners had violated the internal
rules of the bank. However, the notices do cite the rules which petitioners had violated and
refer to the fact that such violations occurred relating to S/A No. 1083-4 account of Sonia
Alfiscar and/or Rosalinda Alqueza. EcaDCI

There is no demand that the notices of dismissal themselves be couched in the

form and language of judicial or quasi-judicial decisions. What is required is that the
employer conduct a formal investigation process, with notices duly served on the
employees informing them of the fact of investigation, and subsequently, if warranted, a
separate notice of dismissal. 1 5 Through the formal investigatory process, the employee
must be accorded the right to present his/her side, which must be considered and
weighed by the employer. The employee must be su ciently apprised of the nature of the
charge against him/her, so as to be able to intelligently defend against the charges.

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 In the instant case, records show that respondent bank complied with the two-
notice rule prescribed in Article 277(b) of the Labor Code. 1 6 Petitioners were given all
avenues to present their side and disprove the allegations of respondent bank. An informal
meeting was held between the branch manager of MOB, the three petitioners and Mr.
Gener, the Vice-President of the PCIB Employees Union. As per report, petitioners
admitted having used Al scar's account to divert funds intended for other accounts. A
special audit investigation was conducted to determine the extent of the fraudulent
transactions. Based on the results of the investigation, respondent bank sent show-cause
memoranda to petitioners, asking them to explain their lapses, under pain of disciplinary
action. The memoranda, which constitute the rst notice, speci ed the various
questionable acts committed by petitioners.
Afterwards, petitioners submitted their respective replies to the memoranda. This
very well complies with the requirement for hearing, by which petitioners were afforded the
opportunity to defend themselves. The second notice came in the form of the termination
memoranda, informing petitioners of their dismissal from service. From the foregoing, it is
clear that the required procedural due process for their termination was strictly complied
with.
All told, we hold that the factual appreciation and conclusions rendered by the labor
arbiter are not worthy of adoption by this Court. In contrast, from the factual
determinations made by the NLRC and the Court of Appeals, we accept the following facts
as proven:
1. Petitioner Cadiz reserved S/A No. 1083-4 in July 1987 as reflected on
respondent bank's "new account register."
2. Foreign denominated checks payable to other payees were diverted
into the said account.
3. The various deposit slips, covering the said checks, did not bear the
machine validation of any of the tellers-in-charge.
4. The signatures of the MOB officers appearing on the said deposit
slips were in fact forged.
5. The posting of said bank transactions bore the initials of petitioners
Bongkingki or Gloria.
6. The deposit slips were coded as "1511" or "on-us check."
7. Petitioner Cadiz agreed to pay Alqueza the equivalent amount of
$600.00 but it was made to appear that Alfiscar paid the said
amount.
8. In view of these findings, petitioners were served with show-cause
memoranda asking them to explain the lapses.
9. Finding their explanations unsatisfactory, petitioners were terminated
from employment.
It is from these established facts that we consider the arguments now presented by
petitioners. In light of these facts, petitioners' arguments hardly detract from the
conclusion that their behavior in the course of the discharge of their duties is clearly
malfeasant, and constitutes ground for their termination on account of just cause. HCaIDS

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 First, petitioners insist that the show-cause memoranda served on them did not
impute any fraudulent behavior, but merely lapses. We disagree.
The show-cause memoranda were occasioned by the con dential report prepared
by Sandig, as well as the ndings of the special audit examination. The con dential report
prepared by Sandig addressed to the Vice-President of respondent bank pertains to the
discovery of fraudulent transactions on S/A No. 1083-4 involving three employees of
respondent bank. The report detailed how the events transpired, including the admissions
of petitioners. From there, a special audit examination was conducted to make a thorough
investigation of the questioned account. The examination yielded conspicuous ndings
that anomalous transactions had taken place involving petitioners.
Moreover, the show-cause memoranda respectively served on petitioners clearly
indicate that they were being made to answer questions pertaining to possible anomalous
behavior on their part. For example, petitioners were asked to explain why they had posted
the questioned deposits on the ledger, although there were no teller validations or teller
stamps, and also on what basis they considered such transactions to be valid. 1 7 On the
other hand, the show-cause memorandum to Cadiz directly asks him to provide the
personal details of Sonia Al scar, why he went out of his way to make a special
arrangement for the mysterious Al scar, and other questions pertaining to the Al scar
accounts.
We thus cannot give credence to the averments of petitioners that the memoranda
pertain to "lapses", and not fraudulent transactions. The bank could not have been
expected to conclude outright that petitioners were guilty of fraud, despite all the indicia
that they indeed were. Certainly, the purpose of the show-cause memoranda was to afford
petitioners the opportunity to acquit themselves of culpable responsibility. It would have
been quite irresponsible for the bank to have premised the queries therein on irretractable
conclusions that petitioners had been guilty of anomalous transactions.
Second, petitioners contend that they should be relieved of any liability considering
that respondent bank did not suffer a pecuniary loss. This claim must obviously fail.
There is jurisprudential support, as noted by the Court of Appeals in citing University
of the East v. NLRC 1 8 that lack of material or pecuniary damages would not in any way
mitigate a person's liability nor obliterate the loss of trust and con dence. In the case of
Etcuban v. Sulpicio Lines, 1 9 this Court definitively ruled that:
. . . Whether or not the respondent bank was nancially prejudiced is
immaterial. Also, what matters is not the amount involved, be it paltry or
gargantuan; rather the fraudulent scheme in which the petitioner was involved,
which constitutes a clear betrayal of trust and confidence. . . .

Moreover, it cannot be discounted that as bank employees, the responsibilities of

petitioners are impressed with a high degree of public interest. Private persons entrust
their fortunes to banks, and it would cause a breakdown of the nancial order if the judicial
system were to leave unsanctioned bank employees who treat depositor's accounts as
their own private kitty.
Still, petitioners insist that respondent bank never lost trust and con dence in them
as it did not place them under preventive suspension, and more tellingly, it even promoted
them after the labor arbiter had ordered their reinstatement. Preventive suspension, which
is never obligatory on the part of the employer, may be resorted to only when the
continued employment of the employee poses "a serious and imminent threat to the life or
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 property of the employer or of his co-workers." 2 0 The bank points out that the Al scar
account, through which the anomalous transactions were coursed, was no longer active at
the time the fraud was discovered. 2 1 Clearly, the bank had reason to conclude that the
imminence of the threat posed by the employees was not as vital as it would have been
had the dubious account still been open. SHTcDE

As to the alleged promotions, the original employer, PCIB, admits that petitioners
had been reinstated by reason of the Decision, but such act was by no means voluntary.
PCIB however does not rebut the allegations that Bongkingki and Cadiz were assigned to
sensitive positions within the bank after their compulsory reinstatement. This may be so,
but the fact that PCIB lost no time in removing the employees from the plantilla after the
NLRC reversed the labor arbiter's Decision hardly evinces any continuing trust and
con dence on the part of the bank, as maintained by petitioners. Moreover, considering
that these reinstated employees were, for the meantime, regular employees of the bank, it
is within the discretion of PCIB to reassign them as it sees t, taking into account the
circumstances.
Moreover, it would simply be temerarious for the Court to sanction the
reinstatement of bank employees who have clearly engaged in anomalous banking
practices. The particular duciary responsibilities reposed on banks and its employees
cannot be emphasized enough. The duciary nature of banking 2 2 is enshrined in Republic
Act No. 8791 or the General Banking Law of 2000. Section 2 of the law speci cally says
that the State recognizes the " duciary nature of banking that requires high standards of
integrity and performance." 2 3 The bank must not only exercise "high standards of integrity
and performance," it must also ensure that its employees do likewise because this is the
only way to ensure that the bank will comply with its fiduciary duty. 2 4
All given, we a rm the conclusion that petitioners were dismissed for just cause.
Loss of trust and con dence is one of the just causes for termination by employer under
Article 282 of the Labor Code. The breach of trust must be willful, meaning it must be done
intentionally, knowingly, and purposely, without justi able excuse. 2 5 Ideally, loss of
con dence applies only to cases involving employees occupying positions of trust and
con dence or to those situations where the employee is routinely charged with the care
and custody of the employer's money or property. 2 6 Utmost trust and con dence are
deemed to have been reposed on petitioners by virtue of the nature of their work.
The facts as established, as well as the need to assert the public interest in
safeguarding against bank fraud, militate against the present petition.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision of the Court
of Appeals AFFIRMED. Costs against petitioners.
SO ORDERED.
Puno, Austria-Martinez and Callejo, Sr., JJ., concur.
Chico-Nazario, J., is on leave.

Footnotes
1. Rollo, pp. 8-9.
2. Id. at 68-73.
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 3. Id. at 75-79.
4. Id. at 80-81.
5. Id. at 115-123.
6. Id. at 124-140. Penned by Commissioner Rogelio I. Rayala and concurred in by Presiding
Commissioner Edna Bonto-Perez. Commissioner Victoriano R. Calaycay did not take
part.

7. Id. at 191-204. Penned by Associate Justice Delilah Vidallon-Magtolis, concurred in by

Associate Justices Teodoro P. Regino and Josefina Guevara-Salonga.
8. Id. at p. 3.
9. Id. at 25-26.
10. Id. at 343-425.
11. Union Motor Corporation v. National Labor Relations Commission, G.R. No. 159738, 9
December 2004, 445 SCRA 683, citing Superlines Transportation Company, Inc. and
Manolet Lavides v. ICC Leasing and Financing Corporation, G.R. No. 150673, 28
February 2003, 398 SCRA 508.
12. Fujitsu Computer Products Corporation v. Court of Appeals, G.R. No. 158232, 31 March
2005, 454 SCRA 737, citing Globe Telecom, Inc. v. Florendo-Flores, G.R. No. 150092, 27
September 2002, 390 SCRA 201; Caingat v. National Labor Relations Commission, G.R.
No. 154308, 10 March 2005.
13. Rollo, p. 120.
14. Id. at 121.
15. See Article 277, Labor Code.
16. ART. 277. Miscellaneous provisions. —
xxx xxx xxx
(b) Subject to the constitutional right of workers to security of tenure and their
right to be protected against dismissal except for just and authorized cause and without
prejudice to the requirement of notice under Article 283 of this Code, the employer shall
furnish the worker whose employment is sought to be terminated a written notice
containing a statement of the causes for termination and shall afford the latter ample
opportunity to be heard and defend himself with the assistance of his representative if
he so desire in accordance with company rules and regulations promulgated pursuant to
guidelines set by the Department of Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional branch of the National
Labor Relations Commission. The burden of proving that the termination was for a valid
or authorized cause shall rest on the employer. The Secretary of the Department of
Labor and Employment may certify the dispute in the event of a prima facie finding by
the appropriate official of the Department of Labor and Employment before whom such
dispute pending that the termination may cause a serious labor dispute or is in
implementation of a mass lay-off.
17. Rollo, pp. 458, 461.
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 18. G.R. No. 71065, 22 November 1985, 140 SCRA 296.
19. G.R. No. 148410, 17 January 2005, 448 SCRA 516.

20. See Section 3, Rule XIV, Book IV, Omnibus Rules Implementing the Labor Code.
21. Rollo p. 417
22. Solidbank Corporation v. Arrieta, G.R. No. 152720, 17 February 2005, 451 SCRA 711,
citing Bank of the Philippine Islands v. Casa Montessori Internationale, G.R. No. 149454,
28 May 2004, 430 SCRA 261.

23. Associated Bank v. Tan, G.R. No. 156940, 14 December 2004, 446 SCRA 282.
24. The Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 138569, 11
September 2003, 410 SCRA 562.
25. PNCC v. Matias, G.R. No. 156283, 6 May 2005, citing Gonzales v. National Labor
Relations Commission, 26 March 2001, 355 SCRA 195; P.J. Lhuillier Inc. v. National
Labor Relations Commission, G.R. No. 158758, 29 April 2005, citing Tiu v. National
Labor Relations Commission, G.R. No. 83433, 12 November 1992, 215 SCRA 540; Felix v.
NLRC, G.R. No. 148256, 17 November 2004, 442 SCRA 465, citing De la Cruz v. NLRC,
268 SCRA 458 (1997).

26. Supra note 16; Mabeza v. NLRC and Hotel Supreme, 338 Phil. 386 (1997).

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