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had been withdrawn by Doronilla who also opened a current account and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 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 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 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

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.
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 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.
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
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 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 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 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.
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.

(Producers Bank of the Philippines v. Court of Appeals, G.R. No. 115324,

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[February 19, 2003], 445 PHIL 702-717)