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.

Domingo & Dizon for petitioner.

Mauricio Law Office for private respondent.

SYNOPSIS

Upon request of a friend, Franklin Vives accommodated Arturo Doronilla

by opening a savings account for Sterela Marketing, in coordination with
Producer's Bank assistant branch manager, Rufo Atienza. The purpose was for
incorporation, and the agreement was that the money would not be removed
from Sterela's savings account and returned to Vives after thirty (30) days.
Later, however, part of the money had been withdrawn by Doronilla who also
opened a current account and authorized the bank to debit the savings account
to cover overdrawing in the current account. Vives filed a case for recovery of
sum of money and both the trial court and the appellate court ruled on the
solidary liability of Producers Bank to Vives. Hence, this appeal. IDSEAH

The Court affirmed the appealed decision. Under Art. 2180 of the Civil
Code, employers shall be held liable for damages caused by their employees
acting within the scope of their assigned tasks. The Bank, through its employee
Atienza, was partly responsible for the loss of Vives' money and is liable for its
restitution. That despite limitation on the savings account passbook issued to
Mrs. Vives on behalf of Sterela, Doronilla was allowed to withdraw several times
without presentation of a passbook as required.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE TRIAL

COURT ADOPTED BY THE APPELLATE COURT, RESPECTED. — 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. 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
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 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.
2. CIVIL LAW; SPECIAL CONTRACTS; LOAN; MUTUUM AND
COMMODATUM, DISTINGUISHED. — 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 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 the parties shall be
considered in such determination.
3. ID.; ID.; ID.; ADDITIONAL AMOUNT PAID TO ORIGINAL AMOUNT
LOANED AS INTEREST DID NOT CONVERT AGREEMENT OF COMMODATUM TO
MUTUUM. — 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.
4. ID.; EXTRA-CONTRACTUAL OBLIGATIONS; QUASI-DELICTS;
EMPLOYERS LIABLE FOR DAMAGES CAUSED BY 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
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 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 though in doing such act, the employee may have failed in its
duty to the employer and disobeyed the latter's instructions. ACTEHI

DECISION

CALLEJO, SR., J : p

This is a petition for review on certiorari of the Decision 1 of the Court of

Appeals dated June 25, 1991 in CA-G.R. CV No. 11791 and of its Resolution 2
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 (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
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 P90,000.00 remained therein. He likewise told them
that Mrs. Vives could not withdraw said remaining amount because it had to
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 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.
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 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 attorney's fees; and

(d) the costs of the suit.

SO ORDERED. 8

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 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;

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 SALUNDARES 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 12 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.
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 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 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. 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 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. 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 P200,000.00 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.

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 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
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 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. 24 The Court's jurisdiction is in principle
limited to reviewing errors of law that might have been committed by the Court
of Appeals. 25 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. 26 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.
I n 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.

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 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
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, 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

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 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 xxx 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 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 P200,000.00, as "per coordination with Mr. Rufo Atienza,
Assistant Manager of the Bank . . ." (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
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 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 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 . . . . 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. 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
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 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 interests 34 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 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, 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.

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 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.
20. Rollo, Petitioner's Memorandum, pp. 13-14.
21. Id. at 11-12.
22. Rollo, p. 75; Private respondent's Memorandum, pp. 8-9.
23. Id. at 75-77; Id. at 12-16.
24. Flores v. Uy, G.R. No. 121492, October 26, 2001; Lim v. People, G.R. No.
143231, October 26, 2001.
25. Section 1, Rule 45, Revised Rules of Civil Procedure.

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

27. Tanguilig v. Court of Appeals, 266 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.
28. Tanguilig v. Court of Appeals, supra, p. 84.
29. Rollo, pp. 40-41, 60.
30. Exhibit "B," Folder of Exhibits, p. 3, italics supplied.
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.
34. See note 31.

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

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