PHILIPPINE NATIONAL BANK, PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND BERNARDO REBANO, RESPONDENTS.

This is a petition for review on certiorari under Rule 45
of the Rules of Court, filed by the Philippine National Bank (PNB, for short)
questioning the decision* of the Intermediate Appellate Court, now Court of
Appeals, in AC-G.R. No. Sp.-03784 entitled “Bernardo Rebano
vs. PNB, et al.” promulgated on 7 January 1985, reconsideration of which was denied in the
resolution of 19 February 1985.

Private respondent Bernardo Rebano,
senior bookkeeper of the PNB Buendia Branch since 6 April 1976, was charged by the PNB
Regional Investigating Committee on 3
April 1979 with serious violations of Bank Rules & Regulations,
com­mitted as follows:

“1. 
That you allowed withdrawals against uncollected deposits in
violation of the following Bank regulation –

‘No withdrawal against uncollected deposits shall be allowed.’

“2. 
That on various dates indicated in the attached list, you posted
withdrawals without approval of the authorized branch officials.  x x x.“^[1]

Rebano’s culpability stemmed from the
discovery of check-kiting operations at the PNB Buendia
Branch sometime in 1978 and committed as follows:

“That Mr. Monahar B. Hira of Indian nationa­lity opened current account number
265-811280-8 with Buendia Branch on February 28,
1978; that the initial deposit to the account was a check for P500.00 drawn
against the Rizal Commercial Banking Corporation
(RCBC); that after about four months from the opening of CA No. 265-811280-8,
it was uncovered that Mr. Hira perpetrated a kiting
operation involving the Branch and two other commercial banks, namely:  (1) the Rizal
Commercial Banking Corporation and (2) the Metropolitan Bank and Trust Company; that withdrawals against
uncollected deposits allowed by Buendia Branch during
the entire period of the kiting operation amounted to P3,554,658.36 out of the
total check deposits of P3,863,500.00; that expected loss due to returned
checks amounts to P568,934.40 exclusive of interest and other incidental
charges.”^[2]

On 23 March 1981,
the PNB Board of Directors issued Board Resolution No. 506 dismissing private
respondent from the service with forfeiture of all benefits and with prejudice
to reinstatement.  On appeal to the Merit
Systems Board of the Civil Service Commission, the PNB Board’s decision was
affirmed, on the ground that:

“x x x
negligence of respondent was made manifest when despite his being fully aware
of the Memorandum dated March 22, 1978, issued by Buendia
Bank Manager Antonio Acyatan that ‘checks of
P1,000.00 and above which are drawn against uncollected deposits may only be
taken up in the books upon due approval by the branch cashier or any of the
branch officers,’ he disregarded the same by posting ninety-two (92) check
withdrawals covering the period from April 4 to June 21, 1978 without approval
of any bank officers.”^[3]

Private respondent filed a petition for review with the
Intermediate Appellate Court which, while affirming Rebano’s
guilt and participation in the anomalous transactions viola­tive
of Central Bank and PNB rules against kiting, never­theless ordered Rebano’s reinstatement and reduced the penalty from dismissal
to suspension without pay for six (6) months, with reimbursement of one half
(1/2) of back salaries.  The appellate
court considered as a mitigating circumstance respondent’s good faith in
believing that he was implicitly authorized to allow drawings against uncol­lected
deposits by his manager, Mr. Miranda (who was given a lighter penalty by PNB). 
The appellate court, however, disregarded private
respondent’s contention that the manager allowed kiting, holding that an
irregular practice cannot prevail over duly established and promulgated bank
rules. ^[4]

In denying PNB’s motion for
reconsideration, the Court of Appeals decried the bank’s failure to
sufficiently explain why there was great disparity between the penalty imposed
on respondent and the penalties imposed on other persons involved and
investigated in the kiting anomaly.  The
Court of Appeals, accordingly, insisted in applying leniency to Rebano.^[5]

Hence, PNB has availed of the present recourse.

From the beginning, private respondent had consistently claimed
that during his entire stay with the bank, he was not informed/briefed of any
clear or specific rule that posting on the ledger card of checks drawn against
uncollected deposits can be done only after such checks have been duly approved
for encashment by authorized bank officers pursuant to the guidelines set forth
in the Manual of Signing Authority.  He
further contended that the PNB Buendia Branch did not
suffer pecuniary loss.  Besides,
according to respondent, writing or stamping the word POSTED on the check was
not approval for encashment thereof, the responsibility for verifying whether
or not the posted check bears the approval of the authorized officer devolved
upon the paying teller.

There is no question as to petitioner’s guilt.  The findings of fact of the Civil Service
Commission and the Court of Appeals cannot be disturbed as they are based on
substantial evidence, but given the attendant circumstances, the issue boils
down to what is the correct and proper penalty.

We believe that private respondent’s dismissal from the service
is proper.  Based on respondent’s own
allegation, there is no indication that the culpability of the other implicated
officers and employees (Branch Manager, Assistant Manager or Cashier who have
approving authority over checks) was as grave as that of respondent whose act
of posting ninety two (92) checks drawn against uncollected deposits, without
authorization, facilitated their encashment. 
Resolution No. 84-093 of the Civil Service Commission clearly stated:

“It
should be noted that the check with­drawals of Hira
were made against uncollected deposits and therefore, under the Bank Rules,
prior approval of the proper officers is neces­sary before the respondent can
post it in the withdrawal entry of the ledger card and mark the checks
‘posted’.  Thus, respondent’s claim that his postings were never technically approvals nor
authorizations allowing outright encashments of
checks drawn against uncollected deposits is untenable
considering that once a check is marked ‘POSTED’, it
means that the check is good, it is sufficiently funded and the signature of
the drawer is genuine, so that the ‘POSTED’ check can now be encashed or paid by the teller.  This postulate renders false also
respondent’s claim that his postings on the ledger card is (sic) not the operative act which constitutes approval
of check withdrawals against uncollected deposits.  x x x“^[6]

Private respondent was found by the PNB Board of Directors, the
Civil Service Commission and the Court of Appeals guilty of gross
misconduct.  Under Sec. 695 of the
Revised Administrative Code of 1917, a civil service subordinate officer or
employee may, for neglect of duty or violation of reasonable office regulations
xxx be removed from the service. 
Memorandum Circular No. 8, Series of 1970 of the Civil Service
Commission (Guidelines in the appli­cation of Penalties) prescribes the
following penalties for grave offenses:

“1.  Transfer or demotion in rank or salary
from two to three grades or suspension for one year in its minimum period;

2.   Forced resignation without prejudice to
reinstatement to forced resignation with prejudice to reinstatement in its
medium period;

3.   Dismissal in its maximum period.”

Considered as mitigating circumstances are:

“1.  Physical illness

2.  
Good faith

3.  
Length of service in the government

4.  
Analogous circumstances”

The Court of Appeals reduced the penalty from dismissal to
suspension for six (6) months without pay by reason of mitigating circumstances
– good faith and disparity between the penalties imposed on the respondent and
on other implicated offenders.  While it
may indeed be questionable that other persons were not as severely punished,
(unfortunately they are beyond the court’s reach), petitioner’s repeated
violations (92 times), standing alone, merit dismissal.  In Policarpio vs. Fajardo,^[7]
gross misconduct in office by a
sheriff was punished by dismissal from the service with forfeiture of all
benefits.  This was reiterated in Abdulwahid vs. Reyes,^[8]
where a deputy sheriff found guilty of serious misconduct in office was likewise dismissed.  Good faith cannot be appreciated in favor
of private respondent considering the repeated violations.

ACCORDINGLY, the decision appealed from is SET ASIDE.  The decision of the Civil Service Commission
ordering dismissal of private respondent from the service is REINSTATED.

SO ORDERED.

Melencio-Herrera, (Chairman), Sarmiento, and Regalado, JJ., concur.

Paras, J., no part.

* Justice Edgardo
Paras, ponente; concurred
in by Justices Vicente V. Mendoza and Luis A. Javellana.

^[1]
Rollo at 32

^[2]
Ibid, 31

^[3]
Ibid., 33

^[4]
Ibid., 27

^[5]
Ibid., 30

^[6]
Ibid. at 35

^[7]
Adm. Matter No. P–312,
Aug. 3, 1977, 78 SCRA 210

^[8]
Adm. Matter No. P-902 & 926, Jan. 31, 1978; Antonio v. Diaz, Adm.
Matter No. P-1568, 28 Dec. 1979,
94 SCRA 890