"x x x.
It should be noted that the questions raised in this petition involve the correctness of the factual findings of the CA. In petitions for review on certiorari under Rule 45, only questions of law may be raised by the parties and passed upon by this Court. An inquiry into the veracity of the factual findings and conclusions of the CA is not the function of this Court, for this Court is not a trier of facts. Neither is it its function to reexamine and weigh anew the respective evidence of the parties.[21]
The factual findings of the CA are generally binding on this Court.[22] There are recognized exceptions[23] to this rule. FEBTC, however, has failed to satisfactorily show the applicability of any of those exceptions in this case to warrant a reexamination of the findings.
In any case, even granting that factual issues may be considered, the facts would not make a good case for FEBTC because there was no evidence adduced to prove that the respondents received the amount demanded in its complaint. Contrary to the claim of FEBTC, nowhere in the records of this case can one find a document evidencing that Gregoria and Rhoel, or TGI for that matter, received the proceeds of the three (3) promissory notes. Moreover, FEBTC violated the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) by its failure to strictly follow the guidelines in the conferment of unsecured loans set forth under the Manual of Regulations for Banks (MORB), to quote:
Sec. X319 Loans Against Personal Security. The following regulations shall govern credit accommodations against personal security granted by banks.[24]
§ X319.1 General guidelines. Before granting credit accommodations against personal security, banks must exercise proper caution by ascertaining that the borrowers, co-makers, endorsers, sureties and/or guarantors possess good credit standing and are financially capable of fulfilling their commitments to the bank. For this purpose, banks shall keep records containing information on the credit standing and financial capacity of credit applicants.
§ X319.2 Proof of financial capacity of borrower. In addition to the usualpersonal information sheet about the borrower, banks shall require that an application for a credit accommodation against personal security be accompanied by:
a. A copy of the latest income tax returns of the borrower and his co-maker duly stamped as received by the BIR; and
b. If the credit accommodation exceeds ₱500,000.00, a copy of the borrower’s balance sheet duly certified by an Independent Certified Public Accountant (CPA), and in case he is engaged in business, also a copy of the profit and loss statement duly certified by a CPA.
The above documents shall be required to be submitted annually for as long as the credit accommodation is outstanding.
A perusal of the evidentiary records discloses that none of the above-enumerated guidelines was complied with by FEBTC, particularly the bank manager. As the CA stated, banking institutions usually require the following documentations involving loan agreements to be presented before approving any loan or release of the proceeds thereof:
1) Promissory Notes duly signed by the parties;
2) Evidence of Receipt of Proceeds of the Promissory Notes;
3) If a corporation is involved, the appropriate copy of the Board Resolution and a duly notarized Corporate Secretary’s Certificate is required to indicate who the authorized signatories are;
4) If agents sign, they must disclose their principal; and
5) Real Estate Mortgage/Chattel Mortgage/Pledges to secure the payment of the loan.
In this case, although there were promissory notes, there was no proof of receipt by the respondents of the same amounts reflected in the said promissory notes. There was no Board Resolution/Corporate Secretary’s Certificate either, designating the authorized signatories for the corporation specifically for the loan covered by the Promissory Notes. Even granting arguendo that the two Board Resolutions (Exhibits “A” and “B”) dated March 3, 1995 and April 11, 1995, respectively, authorizing Gregoria and Rhoel to transact business with FEBTC, were binding, still the petition would not prosper as there was no evidence of crediting of the proceeds of the promissory notes. Further, there were no collaterals, real estate mortgage, chattel mortgage or pledges to ensure the payment of the loan. The Court is in accord with the CA when the latter wrote:
The bank was remiss in the surveillance of its people because the bank auditors could have easily “spotted” the anomaly that the loan transaction: (1) did not have any Board Resolution/Corporate Secretary’s Certificate; (2) did not have collateral/Real Estate Mortgage/Chattel Mortgage/Pledge and was given “clean;” and (3) there was no disclosure that TGI was the principal involved as borrower – all in violation of accepted banking rules and practices.
Time and again, the Supreme Court has stressed that banking business is so impressed with public interest where the trust and confidence of the public in general is of paramount importance such that the appropriate standard of diligence must be very high, if not the highest degree of diligence. A bank’s liability as obligor is not merely vicarious but primary, wherein the defense of exercise of due diligence in the selection and supervision of its employees is of no moment.
The laxity of the bank cannot be allowed to prejudice the clients of the bank who may unsuspectingly become victims of fraud most likely perpetrated by insiders or employees of the bank, which is made possible when the bank did not follow accepted banking rules and practices and prescribed requirements by the Bangko Sentral in dealing with loan transactions.[25]
The CA was, thus, correct when it dismissed FEBTC’s complaint against the respondents.
x x x."
