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 Later, however, part of the money had been withdrawn by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
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 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
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 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
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 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. 1 0
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.
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 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. 1 1

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 1 2 and several
substitutions of counsel on the part of private respondent. 1 3 On January 17, 2001, the
Court resolved to give due course to the petition and required the parties to submit their
respective memoranda. 1 4 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. 1 5 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. 1 6
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. 1 7
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. 1 8 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. 1 9
Finally, petitioner claims that since there is no wrongful act or omission on its part, it is not
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 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. 2 0
Private respondent, on the other hand, argues that the transaction between him and
Doronilla is not a mutuum but an accommodation, 2 1 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. 2 2
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. 2 3
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. 2 4 The
Court's jurisdiction is in principle limited to reviewing errors of law that might have been
committed by the Court of Appeals. 2 5 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. 2 6 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
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 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. 2 7 In case of doubt, the
contemporaneous and subsequent acts of the parties shall be considered in such
determination. 2 8
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. 2 9 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." 3 0

Said rule notwithstanding, Doronilla was permitted by petitioner, through Atienza, the
Assistant Branch Manager for the Buendia Branch of petitioner, to withdraw therefrom
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 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
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 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 . . . . 3 1

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. 3 2 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. 3 3
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 3 4 even though in the process, Atienza violated some of petitioner's
rules such as those stipulated in its savings account passbook. 3 5 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
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 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.
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 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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