Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

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.

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari of the

Decision1 of the Court of Appeals dated June 25,
1991 in CA-G.R. CV No. 11791 and of its
Resolution2 dated May 5, 1994, denying the
motion for 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 (₱200,000.00)
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
₱200,000.00. 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

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
₱90,000.00 remained therein. He likewise told
them that Mrs. Vives could not withdraw said
remaining 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 ₱175,000.00 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 (₱212,000.00) 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 ₱212,000.00
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. 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:

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 ₱200,000.00,

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 ₱50,000.00 for moral

damages and a similar amount for
exemplary damages;

(c) the amount of ₱40,000.00 for

attorney’s fees; and

(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.9 It likewise denied with
finality petitioner’s motion for 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;
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 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;

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
reply12 and several substitutions of counsel on the
part of private respondent.13 On January 17,
2001, the Court resolved to give due course to
the petition and required the parties to submit
their respective memoranda.14 Petitioner filed its
memorandum on April 16, 2001 while private
respondent submitted his memorandum on
March 22, 2001.

Petitioner contends that the transaction between Petitioner contends that the transaction between
private respondent and Doronilla is a simple loan private respondent and Doronilla is a simple loan
(mutuum) since all the elements of a mutuum are (mutuum) since all the elements of a mutuum are
present: first, what was delivered by private present: first, what was delivered by private
respondent to Doronilla was money, a respondent to Doronilla was money, a
consumable thing; and second, the transaction consumable thing; and second, the transaction
was onerous as Doronilla was obliged to pay was onerous as Doronilla was obliged to pay
interest, as evidenced by the check issued by interest, as evidenced by the check issued by
Doronilla in the amount of ₱212,000.00, or Doronilla in the amount of ₱212,000.00, or
₱12,000 more than what private respondent ₱12,000 more than what private respondent
deposited in Sterela’s bank account.15 Moreover, deposited in Sterela’s bank account.15 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
respondent’s ₱200,000.00 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.17 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 ₱200,000.00 in
Sterela’s account for purposes of its
incorporation.18 Hence, petitioner should not be
held liable for allowing Doronilla to withdraw from
Sterela’s savings account. 1a\^/phi 1.net

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
that it committed no wrong in allowing Doronilla
to withdraw from Sterela’s savings account.19

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,21 since he
did not actually part with the ownership of his
₱200,000.00 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.
There is no merit in the petition.
At the outset, it must be emphasized that only
At the outset, it must be emphasized that only
questions of law may be raised in a petition for
questions of law may be raised in a petition for
review filed with this Court. The Court has
review filed with this Court. The Court has
repeatedly held that it is not its function to
repeatedly held that it is not its function to
analyze and weigh all over again the evidence
analyze and weigh all over again the evidence
presented by the parties during trial.24 The Court’s
presented by the parties during trial.24 The Court’s
jurisdiction is in principle limited to reviewing
jurisdiction is in principle limited to reviewing
errors of law that might have been committed by
errors of law that might have been committed by
the Court of Appeals.25 Moreover, factual findings
the Court of Appeals.25 Moreover, factual findings
of courts, when adopted and confirmed by the
of courts, when adopted and confirmed by the
Court of Appeals, are final and conclusive on this
Court of Appeals, are final and conclusive on this
Court unless these findings are not supported by
Court unless these findings are not supported by
the evidence on record.26 There is no showing of
the evidence on record.26 There is no showing of
any misapprehension of facts on the part of the
any misapprehension of facts on the part of the
Court of Appeals in the case at bar that would
Court of Appeals in the case at bar that would
require this Court to review and overturn the
require this Court to review and overturn the
factual findings of that court, especially since the
factual findings of that court, especially since the
conclusions of fact of the Court of Appeals and
conclusions of fact of the Court of Appeals and
the trial court are not only consistent but are also
the trial court are not only consistent but are also
amply supported by the evidence on record.
amply supported by the evidence on record.
No error was committed by the Court of Appeals
No error was committed by the Court of Appeals
when it ruled that the transaction between
when it ruled that the transaction between
private respondent and Doronilla was a
private respondent and Doronilla was a
commodatum and not a mutuum. A circumspect
commodatum and not a mutuum. A circumspect
examination of the records reveals that the
examination of the records reveals that the
transaction between them was a commodatum.
transaction between them was a commodatum.
Article 1933 of the Civil Code distinguishes
Article 1933 of the Civil Code distinguishes
between the two kinds of loans in this wise:
between the two kinds of loans in this wise:
By the contract of loan, one of the parties
By the contract of loan, one of the parties
delivers to another, either something not
delivers to another, either something not
consumable so that the latter may use the same
consumable so that the latter may use the same
for a certain time and return it, in which case the
for a certain time and return it, in which case the
contract is called a commodatum; or money or
contract is called a commodatum; or money or
other consumable thing, upon the condition that
other consumable thing, upon the condition that
the same amount of the same kind and quality
the same amount of the same kind and quality
shall be paid, in which case the contract is
shall be paid, in which case the contract is
simply called a loan or mutuum.
simply called a loan or mutuum.
Commodatum is essentially gratuitous.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a
Simple loan may be gratuitous or with a
stipulation to pay interest.
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 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.27 In case of doubt, the
contemporaneous and subsequent acts of 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."29 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 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 ₱200,000.00 which
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 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
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."29 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 Sterela’s
savings account and would be returned to
private respondent after thirty (30) days.
the latter deposited in Sterela’s account together
with an additional ₱12,000.00, 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
₱12,000.00 corresponds to the fruits of the
lending of the ₱200,000.00. 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, 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.
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, 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
₱200,000.00 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 for
Sterela in the amount of ₱200,000.00, 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. 1awphi1.nét

Then there is the matter of the ownership of the

Then there is the matter of the ownership of the
fund. Because of the "coordination" between
fund. Because of the "coordination" between Doronilla and Atienza, the latter knew before
Doronilla and Atienza, the latter knew before
hand that the money deposited did not belong to
hand that the money deposited did not belong to
Doronilla nor to Sterela. Aside from such
Doronilla nor to Sterela. Aside from such
foreknowledge, he was explicitly told by
foreknowledge, he was explicitly told by
Inocencia Vives that the money belonged to her
Inocencia Vives that the money belonged to her
and her husband and the deposit was merely to
and her husband and the deposit was merely to
accommodate Doronilla. Atienza even declared
accommodate Doronilla. Atienza even declared
that the money came from Mrs. Vives.
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 He was also told by Mrs. Vives that they were
only accommodating Doronilla so that a only accommodating Doronilla so that a
certification can be issued to the effect that certification can be issued to the effect that
Sterela had a deposit of so much amount to be Sterela had a deposit of so much amount to be
sued in the incorporation of the firm. In the 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
Moreover, the transfer of fund was done without the passbook having been presented. It is an
the passbook having been presented. It is an accepted practice that whenever a withdrawal is
accepted practice that whenever a withdrawal is made in a savings deposit, the bank requires the
made in a savings deposit, the bank requires the presentation of the passbook. In this case, such
presentation of the passbook. In this case, such recognized practice was dispensed with. The
recognized practice was dispensed with. The transfer from the savings account to the current
transfer from the savings account to the current account was without the submission of the
account was without the submission of the passbook which Atienza had given to Mrs. Vives.
passbook which Atienza had given to Mrs. Vives. Instead, it was made to appear in a certification
Instead, it was made to appear in a certification signed by Estrella Dumagpi that a duplicate
signed by Estrella Dumagpi that a duplicate passbook was issued to Sterela because the
passbook was issued to Sterela because the original passbook had been surrendered to the
original passbook had been surrendered to the Makati branch in view of a loan accommodation
Makati branch in view of a loan accommodation assigning the savings account (Exh. C). Atienza,
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 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 accounts in question, he also was aware that the
original passbook was never surrendered. He 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 ₱200,000.00 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 Clearly Atienza had committed wrongful acts that
had resulted to the loss subject of this case. x x had resulted to the loss subject of this case. x x
x.31 x.31

Under Article 2180 of the Civil Code, employers Under Article 2180 of the Civil Code, employers
shall be held primarily and solidarily liable for shall be held primarily and solidarily liable for
damages caused by their employees acting damages caused by their employees acting
within the scope of their assigned tasks. To hold 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.32 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 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 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
interests34 even though in the process, Atienza
violated some of petitioner’s rules such as those
stipulated in its savings account passbook.35 It
was established that the transfer of funds from
Sterela’s 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 respondent’s loss.
The foregoing shows that the Court of Appeals
The foregoing shows that the Court of Appeals correctly held that under Article 2180 of the Civil
correctly held that under Article 2180 of the Civil Code, petitioner is liable for private respondent’s
Code, petitioner is liable for private respondent’s loss and is solidarily liable with Doronilla and
loss and is solidarily liable with Doronilla and Dumagpi for the return of the ₱200,000.00 since
Dumagpi for the return of the ₱200,000.00 since it is clear that petitioner failed to prove that it
it is clear that petitioner failed to prove that it exercised due diligence to prevent the
exercised due diligence to prevent the unauthorized withdrawals from Sterela’s savings
unauthorized withdrawals from Sterela’s savings account, and that it was not negligent in the
account, and that it was not negligent in the selection and supervision of Atienza.
selection and supervision of Atienza. Accordingly, no error was committed by the
Accordingly, no error was committed by the appellate court in the award of actual, moral and
appellate court in the award of actual, moral and exemplary damages, attorney’s fees and costs of
exemplary damages, attorney’s fees and costs of suit to private respondent.
suit to private respondent.
WHEREFORE, the petition is hereby DENIED.
WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the
The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.
Court of Appeals are AFFIRMED.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing

and Austria-Martinez, JJ., concur.

Footnotes

1
Justice Asaali S. Isnani, Ponente, with
Justices Rodolfo A. Nocon, Presiding
Justice, and Antonio M. Martinez,
concurring.

2
Rollo, pp. 54-55.
3
Id. at 37.

4
Ibid.

5
Id. at 37-38.

6
Id. at 38.

7
Id.

8
Id. at 63.

9
Id. at 35-47.

10
Id. at 54-55.

11
Id. at 18-19.

12
Id. at 148, 181.

13
Id. at 176, 199.

14
Id. at 227.

15
Id. at 21.

16
Id. at 22.

17
Id. at 24-27.

18
Id. at 23.

19
Id. at 28.

Rollo, Petitioner’s Memorandum, pp.

20

13-14.

21
Id. at 11-12.

Rollo, p. 75; Private respondent’s

22

Memorandum, pp. 8-9.

23
Id. at 75-77; Id. at 12-16.

Flores v. Uy, G.R. No. 121492, October

24

26, 2001; Lim v. People, G.R. No.

143231, October 26, 2001.

25
Section 1, Rule 45, Revised Rules of
Civil Procedure.

Bañas, Jr. v. Court of Appeals, 325

26

SCRA 259 (2000); Philippine National

Construction Corporation v. Mars
Construction Enterprises, Inc., 325
SCRA 624 (2000).

Tanguilig v. Court of Appeals, 266

27

SCRA 78, 83-84 (1997), citing Kasilag v.

Rodriguez, 69 Phil. 217; 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.

Tanguilig v. Court of Appeals, supra, p.

28

84.

29
Rollo, pp. 40-41, 60.

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

30

emphasis supplied.

31
Rollo, pp. 43-47, citing the Decision of
the Regional Trial Court, pp. 5-8.

Castilex Industrial Corporation v.

32

Vasquez, Jr., 321 SCRA 393 (1999).

18B Am Jur 2d, p. 947, Corporations §

33

2125, citing Pittsburgh, C.C. & S.L.R. Co.

v. Sullivan, 40 NE 138.

34
See note 31.

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