VOL.

397, FEBRUARY 19, 2003 651

Producers Bank of the Philippines vs. Court of Appeals

*
G.R. No. 115324. February 19, 2003.

PRODUCERS BANK OF THE PHILIPPINES (now FIRST

INTERNATIONAL BANK), petitioner, vs. HON. COURT
OF APPEALS AND FRANKLIN VIVES, respondents.

Civil Procedure; Pleadings and Practice; Appeals; Only

questions of law may be raised in a petition for review filed with the
Court.At the outset, it must be emphasized that only questions of
law may be raised in a petition for review filed with this Court. The
Court has repeatedly held that it is not its function to analyze and
weigh all over again the evidence presented by the parties during
trial. The Courts jurisdiction is in principle limited to reviewing
errors of law that might have been committed by the Court of
Appeals. Moreover, factual findings of courts, when adopted and
confirmed by the Court of Appeals, are final and conclusive on this
Court unless these findings are not supported by the evidence on
record.

_______________

* SECOND DIVISION.

652

652 SUPREME COURT REPORTS ANNOTATED

Producers Bank of the Philippines vs. Court of Appeals

Civil Law; Contracts; Loan; Distinguished from Commodatum;

Article 1933 of the Civil Code distinguishes between the two kinds of
loans.By the contract of loan, one of the parties delivers to
another, either something not consumable so that the latter may
use the same for a certain time and return it, in which case the
contract is called a commodatum; or money or other consumable
thing, upon the condition that the same amount of the same kind
and quality shall be paid, in which case the contract is simply called
a loan or mutuum. Commodatum is essentially gratuitous. Simple
loan may be gratuitous or with a stipulation to pay interest. In
commodatum, the bailor retains the ownership of the thing loaned,
while in simple loan, ownership passes to the borrower.
Same; Quasi-Delicts; Employer-Employee Relationship;
Solidary Liability; Employers shall be held primarily and solidarily
liable for damages caused by their employees acting within the scope
of their assigned tasks.Under Article 2180 of the Civil Code,
employers shall be held primarily and solidarily liable for damages
caused by their employees acting within the scope of their assigned
tasks. To hold the employer liable under this provision, it must be
shown that an employer-employee relationship exists, and that the
employee was acting within the scope of his assigned task when the
act complained of was committed. Case law in the United States of
America has it that a corporation that entrusts a general duty to its
employee is responsible to the injured party for damages flowing
from the employees wrongful act done in the course of his general
authority, even though in doing such act, the employee may have
failed in its duty to the employer and disobeyed the latters
instructions.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Domingo &Dizon for petitioner.
Mauricio Law Office for private respondent.

CALLEJO, SR., J.:

1
This is a petition for review on certiorari of the Decision of
the Court of Appeals dated June 25, 1991 in CA-G.R. CV
2
No. 11791 and of its Resolution dated May 5, 1994,
denying the motion for

_______________

1 Justice Asaali S. Isnani, Ponente, with Justices Rodolfo A. Nocon,

Presiding Justice, and Antonio M. Martinez, concurring.
2 Rollo, pp. 54-55.

653
 VOL. 397, FEBRUARY 19, 2003 653
Producers Bank of the Philippines vs. Court of Appeals

reconsideration of said decision filed by petitioner

Producers Bank of the Philippines.
Sometime in 1979, private respondent Franklin Vives
was asked by his neighbor and friend Angeles Sanchez to
help her friend and townmate, Col. Arturo Doronilla, in
incorporating his business, the Sterela Marketing and
Services (Sterela for brevity). Specifically, Sanchez asked
private respondent to deposit in a bank a certain amount of
money in the bank account of Sterela for purposes of its
incorporation. She assured private respondent that he
could withdraw his money from said account within a
months time. Private respondent asked Sanchez to bring
Doronilla to their house so that they could discuss
3
Sanchezs request.
On May 9, 1979, private respondent, Sanchez, Doronilla
and a certain Estrella Dumagpi, Doronillas private
secretary, met and discussed the matter. Thereafter, relying
on the assurances and representations of Sanchez and
Doronilla, private respondent issued a check in the amount
of Two Hundred Thousand Pesos (P200,000.00) in favor of
Sterela. Private respondent instructed his wife, Mrs.
Inocencia Vives, to accompany Doronilla and Sanchez in
opening a savings account in the name of Sterela in the
Buendia, Makati branch of Producers Bank of the
Philippines. However, only Sanchez, Mrs. Vives and
Dumagpi went to the bank to deposit the check. They had
with them an authorization letter from Doronilla
authorizing Sanchez and her companions, in coordination
with Mr, Rufo Atienza, to open an account for Sterela
Marketing Services in the amount of P200,000.00. In
opening the account, the authorized signatories were
Inocencia Vives and/or Angeles Sanchez. A passbook for
Savings4
Account No. 10-1567 was thereafter issued to Mrs.
Vives.
Subsequently, private respondent learned that Sterela
was no longer holding office in the address previously given
to him. Alarmed, he and his wife went to the Bank to verify
if their money was still intact. The bank manager referred
them to Mr. Rufo Atienza, the assistant manager, who
informed them that part of the money in Savings Account
No. 10-1567 had been withdrawn by Doronilla, and that
only P90,000.00 remained therein. He likewise told them
that Mrs. Vives could not withdraw said remaining

_______________

3 Id. at p. 37.
4 Ibid.

654

654 SUPREME COURT REPORTS ANNOTATED

Producers Bank of the Philippines vs. Court of Appeals

amount because it had to answer for some postdated checks

issued by Doronilla. According to Atienza, after Mrs. Vives
and Sanchez opened Savings Account No. 10-1567,
Doronilla opened Current Account No. 10-0320 for Sterela
and authorized the Bank to debit Savings Account No. 10-
1567 for the amounts necessary to cover overdrawings in
Current Account No. 10-0320. In opening said current
account, Sterela, through Doronilla, obtained a loan of
P175,000.00 from the Bank. To cover payment thereof,
Doronilla issued three postdated checks, all of which were
dishonored. Atienza also said that Doronilla could assign or
withdraw the money in Savings Account No. 10-1567
because he was the sole proprietor
5
of Sterela.
Private respondent tried to get in touch with Doronilla
through Sanchez. On June 29, 1979, he received a letter
from Doronilla, assuring him that his money was intact
and would be returned to him. On August 13, 1979,
Doronilla issued a postdated check for Two Hundred
Twelve Thousand Pesos (P212,000.00) in favor of private
respondent. However, upon presentment thereof by private
respondent to the drawee bank, the check was dishonored.
Doronilla requested private respondent to present the same
check on September 15, 1979 but when the latter presented
6
the check, it was again dishonored.
Private respondent referred the matter to a lawyer, who
made a written demand upon Doronilla for the return of his
clients money. Doronilla issued another check for
P212,000.00 in private respondents favor but the check
7
was again dishonored for insufficiency of funds.
Private respondent instituted an action for recovery of
sum of money in the Regional Trial Court (RTC) in Pasig,
Metro Manila against Doronilla, Sanchez, Dumagpi and
petitioner. The case was docketed as Civil Case No. 44485.
He also filed criminal actions against Doronilla, Sanchez
and Dumagpi in the RTC. However, Sanchez passed away
on March 16, 1985 while the case was pending before the
trial court. On October 3, 1995, the RTC of Pasig, Branch
157, promulgated its Decision in Civil Case No. 44485, the
dispositive portion of which reads:

_______________

5 Id., at pp. 37-38.

6 Id., at p. 38.
7 Id.

655

VOL. 397, FEBRUARY 19, 2003 655

Producers Bank of the Philippines vs. Court of Appeals

IN VIEW OF THE FOREGOING, judgment is hereby rendered

sentencing defendants Arturo J. Doronila, Estrella Dumagpi and
Producers Bank of the Philippines to pay plaintiff Franklin Vives
jointly and severally

(a) the amount of P200,000.00, representing the money

deposited, with interest at the legal rate from the filing of
the complaint until the same is fully paid;
(b) the sum of P50,000.00 for moral damages and a similar
amount for exemplary damages;
(c) the amount of P40,000.00 for attorneys fees; and
(d) the costs of the suit.
8
SO ORDERED.

Petitioner appealed the trial courts decision to the Court of

Appeals. In its Decision dated June 25, 1991, the appellate
9
court affirmed in toto the decision of the RTC. It likewise
denied with finality petitioners motion for reconsideration
10
in its Resolution dated May 5, 1994.
On June 30, 1994, petitioner filed the present petition,
arguing that

I.

THE HONORABLE COURT OF APPEALS ERRED IN

UPHOLDING THAT THE TRANSACTION BETWEEN THE
DEFENDANT DORONILLA AND RESPONDENT VIVES WAS
ONE OF SIMPLE LOAN AND NOT ACCOMMODATION;

II.

THE HONORABLE COURT OF APPEALS ERRED IN

UPHOLDING THAT PETITIONERS BANK MANAGER, MR.
RUFO ATIENZA, CONNIVED WITH THE OTHER DEFENDANTS
IN DEFRAUDING PETITIONER (Sic. Should be PRIVATE
RESPONDENT) AND AS A CONSEQUENCE, THE PETITIONER
SHOULD BE HELD LIABLE UNDER THE PRINCIPLE OF
NATURAL JUSTICE;

_______________

8 Id., at p. 63.
9 Id., at pp. 35-47.
10 Id., at pp. 54-55.

656

656 SUPREME COURT REPORTS ANNOTATED

Producers Bank of the Philippines vs. Court of Appeals

III.

THE HONORABLE COURT OF APPEALS ERRED IN

ADOPTING THE ENTIRE RECORDS OF THE REGIONAL TRIAL
COURT AND AFFIRMING THE JUDGMENT APPEALED FROM,
AS THE FINDINGS OF THE REGIONAL TRIAL COURT WERE
BASED ON A MISAPPREHENSION OF FACTS;

IV.

THE HONORABLE COURT OF APPEALS ERRED IN

DECLARING THAT THE CITED DECISION IN SALUDARES VS.
MARTINEZ, 29 SCRA 745, UPHOLDING THE LIABILITY OF AN
EMPLOYER FOR ACTS COMMITTED BY AN EMPLOYEE IS
APPLICABLE;

V.

THE HONORABLE COURT OF APPEALS ERRED IN

UPHOLDING THE DECISION OF THE LOWER COURT THAT
HEREIN PETITIONER BANK IS JOINTLY AND SEVERALLY
LIABLE WITH THE OTHER DEFENDANTS FOR THE AMOUNT
OF P200,000.00 REPRESENTING THE SAVINGS ACCOUNT
DEPOSIT, P50,000.00 FOR MORAL DAMAGES, P50,000.00 FOR
EXEMPLARY DAMAGES, P40,000.00 FOR ATTORNEYS FEES
11
AND THE COSTS OF SUIT.

Private respondent filed his Comment on September 23,

1994. Petitioner filed its Reply thereto on September 25,
1995. The Court then required private respondent to
submit a rejoinder to the reply. However, said rejoinder was
filed only on April 21, 1997, due to petitioners delay12
in
furnishing private respondent with copy of the reply and
several substitutions
13
of counsel on the part of private
respondent. On January 17, 2001, the Court resolved to
give due course to the petition and required
14
the parties to
submit their respective memoranda. Petitioner filed its
memorandum on April 16, 2001 while private respondent
submitted his memorandum on March 22, 2001.
Petitioner contends that the transaction between private
respondent and Doronilla is a simple loan (mutuum) since
all the elements of a mutuum are present: first, what was
delivered by

_______________

11 Id., at pp. 18-19.

12 Id., at pp. 148, 181.
13 Id., at pp. 176, 199.
14 Id., at p. 227.

657

VOL. 397, FEBRUARY 19, 2003 657

Producers Bank of the Philippines vs. Court of Appeals

private respondent to Doronilla was money, a consumable

thing; and second, the transaction was onerous as
Doronilla was obliged to pay interest, as evidenced by the
check issued by Doronilla in the amount of P212,000.00, or
P12,000 more than what 15
private respondent deposited in
Sterelas bank account. Moreover, the fact that private
respondent sued his good friend Sanchez for his failure to
recover his money from Doronilla shows that the
transaction was not merely gratuitous but had a business
angle to it. Hence, petitioner argues that it cannot be held
liable for the return of private respondents P200,000.00
because it is not privy to the transaction between the latter
 16
and Doronilla.
It argues further that petitioners Assistant Manager,
Mr. Rufo Atienza, could not be faulted for allowing
Doronilla to withdraw from the savings account of Sterela
since the latter was the sole proprietor of said company.
Petitioner asserts that Doronillas May 8, 1979 letter
addressed to the bank, authorizing Mrs. Vives and Sanchez
to open a savings account for Sterela, did not contain any
authorization for these two to withdraw from said account.
Hence, the authority to withdraw therefrom remained
exclusively with Doronilla, who was the sole proprietor of
Sterela, 17and who alone had legal title to the savings
account. Petitioner points out that no evidence other than
the testimonies of private respondent and Mrs. Vives was
presented during trial to prove that private respondent
deposited his P200,000.00
18
in Sterelas account for purposes
of its incorporation. Hence, petitioner should not be held
liable for allowing Doronilla to withdraw from Sterelas
savings account.
Petitioner also asserts that the Court of Appeals erred in
affirming the trial courts decision since the findings of fact
therein were not accord with the evidence presented by
petitioner during trial to prove that the transaction
between private respondent and Doronilla was a mutuum,
and that it committed no wrong in allowing 19
Doronilla to
withdraw from Sterelas savings account.

_______________

15 Id., at p. 21.
16 Id., at p. 22.
17 Id., at pp. 24-27.
18 Id., at p. 23.
19 Id., at p. 28.

658

658 SUPREME COURT REPORTS ANNOTATED

Producers Bank of the Philippines vs. Court of Appeals

Finally, petitioner claims that since there is no wrongful

act or omission on its part, it is not liable for the actual
damages suffered by private respondent, and neither may
it be held liable for moral and exemplary damages as well
20
as attorneys fees.
 Private respondent, on the other hand, argues that the
transaction between him and Doronilla is not a mutuum
21
but an accommodation, since he did not actually part with
the ownership of his P200,000.00 and in fact asked his wife
to deposit said amount in the account of Sterela so that a
certification can be issued to the effect that Sterela had
sufficient funds for purposes of its incorporation but at the
same time, he retained some degree of control over his
money through his wife who was made a signatory to the
savings account and in whose possession the savings
22
account passbook was given.
He likewise asserts that the trial court did not err in
finding that petitioner, Atienzas employer, is liable for the
return of his money. He insists that Atienza, petitioners
assistant manager, connived with Doronilla in defrauding
private respondent since it was Atienza who facilitated the
opening of Sterelas current account three days after Mrs.
Vives and Sanchez opened a savings account with
petitioner for said company, as well as the approval of the
authority to debit Sterelas savings account to cover any
23
overdrawings in its current account.
There is no merit in the petition.
At the outset, it must be emphasized that only questions
of law may be raised in a petition for review filed with this
Court. The Court has repeatedly held that it is not its
function to analyze and weigh all over again the evidence
24
presented by the parties during trial. The Courts
jurisdiction is in principle limited to reviewing errors of law
25
that might have been committed by the Court of Appeals.
Moreover, factual findings of courts, when adopted and
confirmed by the Court of Appeals, are final and conclusive
on this

_______________

20 Rollo, Petitioners Memorandum, pp. 13-14.

21 Id., at pp. 11 -12.
22 Rollo, p. 75; Private respondents Memorandum, pp. 8-9.
23 Id., at pp. 75-77; Id., at pp. 12-16.
24 Flores v. Uy, G.R. No. 121492, October 26, 2001, 368 SCRA 347; Lim
v. People, G.R. No. 143231, October 26, 2001, 368 SCRA 436.
25 Section 1, Rule 45, Revised Rules of Civil Procedure.

659

VOL. 397, FEBRUARY 19, 2003 659

 Producers Bank of the Philippines vs. Court of Appeals

Court unless these findings

26
are not supported by the
evidence on record. There is no showing of any
misapprehension of facts on the part of the Court of
Appeals in the case at bar that would require this Court to
review and overturn the factual findings of that court,
especially since the conclusions of fact of the Court of
Appeals and the trial court are not only consistent but are
also amply supported by the evidence on record.
No error was committed by the Court of Appeals when it
ruled that the transaction between private respondent and
Doronilla was a commodatum and not a mutuum. A
circumspect examination of the records reveals that the
transaction between them was a commodatum. Article
1933 of the Civil Code distinguishes between the two kinds
of loans in this wise:

By the contract of loan, one of the parties delivers to another, either

something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the
condition that the same amount of the same kind and quality shall
be paid, in which case the contract is simply called a loan or
mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay
interest.
In commodatum, the bailor retains the ownership of the thing
loaned, while in simple loan, ownership passes to the borrower.

The foregoing provision seems to imply that if the subject of

the contract is a consumable thing, such as money, the
contract would be a mutuum. However, there are some
instances where a commodatum may have for its object a
consumable thing. Article 1936 of the Civil Code provides:

Consumable goods may be the subject of commodatum if the

purpose of the contract is not the consumption of the object, as
when it is merely for exhibition.

Thus, if consumable goods are loaned only for purposes of

exhibition, or when the intention of the parties is to lend
consumable

_______________
 26 Baas, Jr. v. Court of Appeals, 325 SCRA 259 (2000); Philippine
National Construction Corporation v. Mars Construction Enterprises,
Inc., 325 SCRA 624 (2000).

660

660 SUPREME COURT REPORTS ANNOTATED

Producers Bank of the Philippines vs. Court of Appeals

goods and to have the very same goods returned at the end
of the period agreed upon, the loan is a commodatum and
not a mutuum.
The rule is that the intention of the parties thereto shall
be accorded primordial consideration in determining the
27
actual character of a contract. In case of doubt, the
contemporaneous and subsequent acts of the parties shall
28
be considered in such determination.
As correctly pointed out by both the Court of Appeals
and the trial court, the evidence shows that private
respondent agreed to deposit his money in the savings
account of Sterela specifically for the purpose of making it
appear that said firm had sufficient capitalization for
incorporation, with the promise that the amount shall be
29
returned within thirty (30) days. Private respondent
merely accommodated Doronilla by lending his money
without consideration, as a favor to his good friend
Sanchez. It was however clear to the parties to the
transaction that the money would not be removed from
Sterelas savings account and would be returned to private
respondent after thirty (30) days.
Doronillas attempts to return to private respondent the
amount of P200,000.00 which the latter deposited in
Sterelas account together with an additional P12,000.00,
allegedly representing interest on the mutuum, did not
convert the transaction from a commodatum into a
mutuum because such was not the intent of the parties and
because the additional P12,000.00 corresponds to the fruits
of the lending of the P200,000.00. Article 1935 of the Civil
Code expressly states that [t]he bailee in commodatum
acquires the use of the thing loaned but not its fruits.
Hence, it was only proper for Doronilla to remit to private
respondent the interest accruing to the latters money
deposited with petitioner.
Neither does the Court agree with petitioners
contention that it is not solidarily liable for the return of
private respondents money because it was not privy to the
transaction between Doronilla and private respondent. The
nature of said transaction, that is,

_______________

27 Tanguilig v. Court of Appeals, 266 SCRA 78, 83-84 (1997), citing

Kasilag v. Rodriguez, 69 Phil. 217 (1939); 17A Am. Jur. 2d 27 Contracts,
5, citing Wallace Bank & Trust Co. v. First National Bank, 40 Idaho
712, 237 P 284, 50 ALR 316.
28 Tanguilig v. Court of Appeals, supra, p. 84.
29 Rollo, pp. 40-41, 60.

661

VOL. 397, FEBRUARY 19, 2003 661

Producers Bank of the Philippines vs. Court of Appeals

whether it is a mutuum or a commodatum, has no bearing

on the question of petitioners liability for the return of
private respondents money because the factual
circumstances of the case clearly show that petitioner,
through its employee Mr. Atienza, was partly responsible
for the loss of private respondents money and is liable for
its restitution.
Petitioners rules for savings deposits written on the
passbook it issued Mrs. Vives on behalf of Sterela for
Savings Account No. 10-1567 expressly states that

2. Deposits and withdrawals must be made by the depositor

personally or upon his written authority duly authenticated, and
neither a deposit nor a withdrawal will be permitted except upon the
production of the depositor savings bank book in which will be
30
entered by the Bank the amount deposited or withdrawn.

Said rule notwithstanding, Doronilla was permitted by

petitioner, through Atienza, the Assistant Branch Manager
for the Buendia Branch of petitioner, to withdraw
therefrom even without presenting the passbook (which
Atienza very well knew was in the possession of Mrs.
Vives), not just once, but several times. Both the Court of
Appeals and the trial court found that Atienza allowed said
withdrawals because he was party to Doronillas scheme
of defrauding private respondent:

xxx
 But the scheme could not have been executed successfully
without the knowledge, help and cooperation of Rufo Atienza,
assistant manager and cashier of the Makati (Buendia) branch of
the defendant bank. Indeed, the evidence indicates that Atienza
had not only facilitated the commission of the fraud but he likewise
helped in devising the means by which it can be done in such
manner as to make it appear that the transaction was in accordance
with banking procedure.
To begin with, the deposit was made in defendants Buendia
branch precisely because Atienza was a key officer therein. The
records show that plaintiff had suggested that the P200,000.00 be
deposited in his bank, the Manila Banking Corporation, but
Doronilla and Dumagpi insisted that it must be in defendants
branch in Makati for it will be easier for them to get a
certification. In fact before he was introduced to plaintiff, Doronilla
had already prepared a letter addressed to the Buendia branch
manager authorizing Angeles B. Sanchez and company to open a
savings account

_______________

30 Exhibit B, Folder of Exhibits, p. 3, emphasis supplied.

662

662 SUPREME COURT REPORTS ANNOTATED

Producers Bank of the Philippines vs. Court of Appeals

for Sterela in the amount of P200,000.00, as per coordination with

Mr. Rufo Atienza, Assistant Manager of the Bank x x x (Exh. 1).
This is a clear manifestation that the other defendants had been in
consultation with Atienza from the inception of the scheme.
Significantly, there were testimonies and admission that Atienza is
the brother-in-law of a certain Romeo Mirasol, a friend and
business associate of Doronilla.
Then there is the matter of the ownership of the fund. Because of
the coordination between Doronilla and Atienza, the latter knew
before hand that the money deposited did not belong to Doronilla
nor to Sterela. Aside from such foreknowledge, he was explicitly
told by Inocencia Vives that the money belonged to her and her
husband and the deposit was merely to accommodate Doronilla.
Atienza even declared that the money came from Mrs. Vives.
Although the savings account was in the name of Sterela, the
bank records disclose that the only ones empowered to withdraw
the same were Inocencia Vives and Angeles B. Sanchez. In the
signature card pertaining to this account (Exh. J), the authorized
signatories were Inocencia Vives &/or Angeles B. Sanchez. Atienza
stated that it is the usual banking procedure that withdrawals of
savings deposits could only be made by persons whose authorized
signatures are in the signature cards-on file with the bank. He,
however, said that this procedure was not followed here because
Sterela was owned by Doronilla. He explained that Doronilla had
the full authority to withdraw by virtue of such ownership. The
Court is not inclined to agree with Atienza. In the first place, he
was all the time aware that the money came from Vives and did not
belong to Sterela. He was also told by Mrs. Vives that they were
only accommodating Doronilla so that a certification can be issued
to the effect that Sterela had a deposit of so much amount to be
sued in the incorporation of the firm. In the second place, the
signature of Doronilla was not authorized in so far as that account
is concerned inasmuch as he had not signed the signature card
provided by the bank whenever a deposit is opened. In the third
place, neither Mrs. Vives nor Sanchez had given Doronilla the
authority to withdraw.
Moreover, the transfer of fund was done without the passbook
having been presented. It is an accepted practice that whenever a
withdrawal is made in a savings deposit, the bank requires the
presentation of the passbook. In this case, such recognized practice
was dispensed with. The transfer from the savings account to the
current account was without the submission of the passbook which
Atienza had given to Mrs. Vives. Instead, it was made to appear in
a certification signed by Estrella Dumagpi that a duplicate
passbook was issued to Sterela because the original passbook had
been surrendered to the Makati branch in view of a loan
accommodation assigning the savings account (Exh. C). Atienza,
who undoubtedly had a hand in the execution of this certification,
was aware that the contents of the same are not true. He knew that
the passbook was in the

663

VOL. 397, FEBRUARY 19, 2003 663

Producers Bank of the Philippines vs. Court of Appeals

hands of Mrs. Vives for he was the one who gave it to her. Besides,
as assistant manager of the branch and the bank official servicing
the savings and current accounts in question, he also was aware
that the original passbook was never surrendered. He was also
cognizant that Estrella Dumagpi was not among those authorized
to withdraw so her certification had no effect whatsoever.
 The circumstance surrounding the opening of the current
account also demonstrate that Atienzas active participation in the
perpetration of the fraud and deception that caused the loss. The
records indicate that this account was opened three days later after
the P200,000.00 was deposited. In spite of his disclaimer, the Court
believes that Atienza was mindful and posted regarding the opening
of the current account considering that Doronilla was all the while
in coordination with him. That it was he who facilitated the
approval of the authority to debit the savings account to cover any
overdrawings in the current account (Exh. 2) is not hard to
comprehend.
Clearly Atienza had committed wrongful acts that had resulted
31
to the loss subject of this case. x x x.

Under Article 2180 of the Civil Code, employers shall be

held primarily and solidarily liable for damages caused by
their employees acting within the scope of their assigned
tasks. To hold the employer liable under this provision, it
must be shown that an employer-employee relationship
exists, and that the employee was acting within the scope
of his assigned
32
task when the act complained of was
committed. Case law in the United States of America has
it that a corporation that entrusts a general duty to its
employee is responsible to the injured party for damages
flowing from the employees wrongful act done in the course
of his general authority, even though in doing such act, the
employee may have failed in its duty 33
to the employer and
disobeyed the latters instructions.
There is no dispute that Atienza was an employee of
petitioner. Furthermore, petitioner did not deny that
Atienza was acting within the scope of his authority as
Assistant Branch Manager

_______________

31 Rollo, pp. 43-47, citing the Decision of the Regional Trial Court, pp.
5-8.
32 Castilex Industrial Corporation v. Vasquez, Jr., 321 SCRA 393
(1999).
33 18B Am. Jur. 2d, p. 947, Corporations 2125, citing Pittsburgh, C.C.
& S.L.R. Co. v. Sullivan, 40 NE 138.

664

664 SUPREME COURT REPORTS ANNOTATED

 Producers Bank of the Philippines vs. Court of Appeals

when he assisted Doronilla in withdrawing funds from

Sterelas Savings Account No. 10-1567, in which account
private respondents money was deposited, and in
transferring the money withdrawn to Sterelas Current
Account with petitioner. Atienzas acts of helping Doronilla,
a customer of the petitioner, were 34
obviously done in
furtherance of petitioners interests even though in the
process, Atienza violated some of petitioners rules35such as
those stipulated in its savings account passbook. It was
established that the transfer of funds from Sterelas
savings account to its current account could not have been
accomplished by Doronilla without the invaluable
assistance of Atienza, and that it was their connivance
which was the cause of private respondents loss.
The foregoing shows that the Court of Appeals correctly
held that under Article 2180 of the Civil Code, petitioner is
liable for private respondents loss and is solidarily liable
with Doronilla and Dumagpi for the return of the
P200,000.00 since it is clear that petitioner failed to prove
that it exercised due diligence to prevent the unauthorized
withdrawals from Sterelas savings account, and that it
was not negligent in the selection and supervision of
Atienza. Accordingly, no error was committed by the
appellate court in the award of actual, moral and
exemplary damages, attorneys fees and costs of suit to
private respondent.
WHEREFORE, the petition is hereby DENIED. The
assailed Decision and Resolution of the Court of Appeals
are AFFIRMED.
SO ORDERED.

Bellosillo (Chairman), Mendoza, Quisumbing and

Austria-Martinez, JJ., concur.

Petition denied, judgment affirmed and resolution

affirmed.

Note.The liability of the registered owner of a public

service vehicle, like petitioner Philtranco, for damages
arising from the tortuous acts of the driver is primary,
direct, and joint and severally or solidary with the driver.
(Philtranco Service Enterprises, Inc. vs. CA, 273 SCRA 562
[1997])
 o0o

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34 See note 31.

35 Exhibit B, Folder of Exhibits, p. 3.

665

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