TO: Makati Bank

FROM: Austin Viel L. Medina

DATE: March 11, 2017

FILE NO: 20056-3

RE: PEDRO SANTOS CASE

ISSUES: What are the liabilities of Pedro Santos for the act committed?

DISCUSSION

Pedro Santos committed Estafa through Abuse of Confidence under Art. 315,
paragraph 1(a) of the Revised Penal Code, which states that:

Art. 315. Swindling (estafa). Any person who shall defraud another by .

1. With unfaithfulness or abuse of confidence:

(a) By altering substance, quantity, or quality of anything of value which
the offender shall deliver by virtue of an obligation to do so, even
though such obligation be based on an immoral or illegal
consideration;

Estafa, as defined by the Revised Penal Code, is the commission of any act to
commit fraud which resulted injury or damage to another person. Furthermore, Estafa
has two indispensable basic elements: (a) Fraud; and (b) Resulting damage or intent to
cause damage capable of pecuniary estimation. The requisites of Estafa were met in
this case. Furthermore, Abuse of confidence is defined as the abuse of the trust or
confidence of a person to another either by means of employment, relationship or
position.

Santos personally received the payment of Juan Dela Cruz (JDC for brevity)
amounting to P 180,000 as monthly due and issued a Deposit Slip, being the Manager
of the Makati Bank. Since it was discovered later on that the Deposit slip was not
machine validated, which rendered JDC to be due of his obligation and charged with the
penalties incurred thereto. Since he used his position as the Manager of the Makati
Bank to obtain fraudulently the payment, he had abused the trust of JDC to him and
caused injury thereafter.

Santos also violated the rules under Sec. 55 (a) of the R.A. 8791 or the Banking
Law which states that:

Sec. 55. No director, officer, employee, or agent of any bank shall

(a) Make false entries in any bank report or statement or participate
in any fraudulent transaction, thereby affecting the financial interest of, orcausing
damage to, the bank or any person;

In this case, it is evident that Santos falsified the Deposit Slip to commit the
fraudulent act. Since he had used his position as Manager, he defrauded the Makati
Bank by the issuance of the said Deposit Slip. Furthermore, he has transacted JDC
personally, which is the client of the Bank. He obviously violated the standard
procedure regarding transactions to clients.

SUMMARY OF INITIAL FACTS

Juan Dela Cruz (JDC for brevity) had been a special client of the Bank for 10
years. JDC loaned a sum P 10,000,000 with 6% annual legal interest, secured by a
Real Estate Mortgage. He deposits usually in Pasig branch of the Makati Bank. Pedro
Santos, the manager of the said bank, notified JDC via call and told him that his monthly
due is due on January 27, informing JDC that if he won't be able to comply, he'll be
charged with penalty. In the regular course of business, the bank sends notice when
past due, in case of VIP clients, they receive calls from bank managers instead of
demand letters to inform them of the delayed payment.

In response, JDC called Santos personally and told him that he'll pay. Santos
went to JDC's home on January 30, though it is outside the bank's protocol, and
received the amount of PHP 180,000 as monthly due. Thereafter Santos issued to JDC
a deposit slip affixing his signature therein, reassuring JDC that the payment is settled
and the latter will not be charged with penalty.

In the afternoon of Jan.30, Santos was still present in the bank. The day after,
Santos suddenly did not attend office without leave and he was nowhere to be found,
hence he was identified as AWOL (Absence without Leave) and was thereafter
dismissed.

On February 6, Nicanor Reyes was appointed as Manager of Makati Bank.

Reyes was the Manager of the Pasig branch of Makati Bank before he was appointed.
Reyes noticed that according to the information of the Bank, JDC had not paid his
monthly due which is due on January 27. Reyes went to the house of JDC to inform the
latter of his obligation but JDC, in response, claimed that he had already paid the said
monthly due. In support of his claim, JDC presented the copy of the deposit slip, which
had the signature of Santos, to Reyes. After verification, Reyes found out, informing
JDC, that the deposit slip is not machine validated, as a result, it is not recorded in the
Bank.

CONCLUSION

Santos had gravely committed violations of the rule on Banking Law and Estafa
under the Revised Penal Code.

RECOMMENDATION

I recommend to the Makati Bank to initiate an action to recover the P 180,000 as

the payment of the monthly due of JDC and to make Santos answered for the violation
of the Standard Procedure on Client Transaction and for the violation of the rule under
the Banking Law.