12. PRODUCERS BANK OF THE PHILS. VS.
CA though in doing such act, the employee may have failed in its duty to the employer
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
Court’s 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 employee’s wrongful act done in the course of his general authority, even
and disobeyed the latter’s 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.:
This is a petition for review on certiorari of the Decision of the Court of
1
Appeals dated June 25, 1991 in CA-G.R. CV No. 11791and of its
Resolution dated May 5, 1994, denying the motion for
2
_______________
Justice Asaali S. Isnani, Ponente, with Justices Rodolfo A. Nocon, Presiding Justice, and
1
Antonio M. Martinez, concurring.
Rollo, pp. 54-55.
2
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
month’s time. Private respondent asked Sanchez to bring Doronilla to their
house so that they could discuss Sanchez’s request. 3
On May 9, 1979, private respondent, Sanchez, Doronilla and a certain
Estrella Dumagpi, Doronilla’s 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
Page 1 of 7
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
Savings Account No. 10-1567 was thereafter issued to Mrs. Vives. 4 44485. He also filed criminal actions against Doronilla, Sanchez and
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
_______________
3Id. at p. 37.
4Ibid.
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
of Sterela. 5
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 the
check, it was again dishonored. 6
Private respondent referred the matter to a lawyer, who made a written
demand upon Doronilla for the return of his client’s money. Doronilla
issued another check for P212,000.00 in private respondent’s favor but the
check was again dishonored for insufficiency of funds. 7
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.
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:
_______________
5Id., at pp. 37-38.
6Id., at p. 38.
7Id.
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—
1. (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;
2. (b)the sum of P50,000.00 for moral damages and a similar amount for
exemplary damages;
3. (c)the amount of P40,000.00 for attorney’s fees; and
4. (d)the costs of the suit.
SO ORDERED.” 8
Petitioner appealed the trial court’s decision to the Court of Appeals. In its
Decision dated June 25, 1991, the appellate court affirmed in toto the
decision of the RTC. It likewise denied with finality petitioner’s motion for
9
reconsideration in its Resolution dated May 5, 1994. 10
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;
Page 2 of 7
 II.
THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING THAT
PETITIONER’S 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 ATTORNEY’S FEES AND THE COSTS OF SUIT.
11
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 petitioner’s delay in
furnishing private respondent with copy of the reply and several
12
substitutions of counsel on the part of private respondent. On January 17,
13
2001, the Court resolved to give due course to the petition and required the
parties to submit their respective memoranda. Petitioner filed its
14
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
_______________
Id., at pp. 18-19.
11
Id., at pp. 148, 181.
12
Id., at pp. 176, 199.
13
Id., at p. 227.
14
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 private respondent deposited in
Sterela’s bank account. Moreover, the fact that private respondent sued
15
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 respondent’s P200,000.00 because it is not privy to the
transaction between the latter and Doronilla. 16
It argues further that petitioner’s 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 Doronilla’s 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, and who
alone had legal title to the savings account. Petitioner points out that no
17
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 in Sterela’s account for purposes of its incorporation. Hence,
18
petitioner should not be held liable for allowing Doronilla to withdraw from
Sterela’s savings account.
Petitioner also asserts that the Court of Appeals erred in affirming the
trial court’s 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
Page 3 of 7
that it committed no wrong in allowing Doronilla to withdraw from
Sterela’s savings account. 19
_______________
Id., at p. 21.
15
Id., at p. 22.
16
Id., at pp. 24-27.
17
Id., at p. 23.
18
Id., at p. 28.
19
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 as attorney’s fees. 20
Private respondent, on the other hand, argues that the transaction
between him and Doronilla is not a mutuum but an accommodation, since 21
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 account passbook
was given. 22
He likewise asserts that the trial court did not err in finding that
petitioner, Atienza’s employer, is liable for the return of his money. He
insists that Atienza, petitioner’s assistant manager, connived with
Doronilla in defrauding private respondent since it was Atienza who
facilitated the opening of Sterela’s 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 Sterela’s savings
account to cover any overdrawings in its current account. 23
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 presented by the parties during trial. The Court’s
24
jurisdiction is in principle limited to reviewing errors of law that might
have been committed by the Court of Appeals. Moreover, factual findings
25
of courts, when adopted and confirmed by the Court of Appeals, are final
and conclusive on this
_______________
Rollo, Petitioner’s Memorandum, pp. 13-14.
20
Id., at pp. 11 -12.
21
Rollo, p. 75; Private respondent’s Memorandum, pp. 8-9.
22
Id., at pp. 75-77; Id., at pp. 12-16.
23
Flores v. Uy, G.R. No. 121492, October 26, 2001, 368 SCRA 347; Lim v. People, G.R. No.
24
143231, October 26, 2001, 368 SCRA 436.
Section 1, Rule 45, Revised Rules of Civil Procedure.
25
659
VOL. 397, FEBRUARY 19, 2003 659
Producers Bank of the Philippines vs. Court of Appeals
Court unless these findings are not supported by the evidence on
record. There is no showing of any misapprehension of facts on the part of
26
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
_______________
Page 4 of 7
 Bañas, Jr. v. Court of Appeals, 325 SCRA 259(2000); Philippine National Construction
26
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 actual character of a
contract. In case of doubt, the contemporaneous and subsequent acts of
27
the parties shall be considered in such determination. 28
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 returned within
thirty (30) days.” Private respondent merely “accommodated” Doronilla by
29
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 Sterela’s savings account and would be
returned to private respondent after thirty (30) days.
Doronilla’s attempts to return to private respondent the amount of
P200,000.00 which the latter deposited in Sterela’s 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 latter’s money deposited with
petitioner.
Neither does the Court agree with petitioner’s contention that it is not
solidarily liable for the return of private respondent’s money because it was
not privy to the transaction between Doronilla and private respondent. The
nature of said transaction, that is,
_______________
27Tanguilig 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.
28Tanguilig v. Court of Appeals, supra, p. 84.
29Rollo, 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 petitioner’s liability for the return of private respondent’s 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
respondent’s money and is liable for its restitution.
Petitioner’s 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 entered by the Bank the amount deposited or withdrawn.” 30
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
Doronilla’s “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 defendant’s 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 defendant’s
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
Page 5 of 7
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 Atienza’s 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 to the loss
subject of this case. x x x.31
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
32
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
employee’s 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 latter’s instructions. 33
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
_______________
Rollo, pp. 43-47, citing the Decision of the Regional Trial Court, pp. 5-8.
31
32Castilex Industrial Corporation v. Vasquez, Jr.,321 SCRA 393 (1999).
3318B 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 Sterela’s Savings
Account No. 10-1567, in which account private respondent’s money was
deposited, and in transferring the money withdrawn to Sterela’s Current
Account with petitioner. Atienza’s acts of helping Doronilla, a customer of
the petitioner, were obviously done in furtherance of petitioner’s
interests even though in the process, Atienza violated some of petitioner’s
34
rules such as those stipulated in its savings account passbook. It was 35
established that the transfer of funds from Sterela’s savings account to its
Page 6 of 7
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 respondent’s loss.
The foregoing shows that the Court of Appeals correctly held that under
Article 2180 of the Civil Code, petitioner is liable for private respondent’s
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
Sterela’s 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,
attorney’s 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])

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