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PRODUCERS BANK OF PHILIPPINES v. CA

FACTS:

Private respondent Franklin Vives was asked by his neighbor to help incorporate Col. Arturo Doronilla's business, Sterela Marketing and Services. Private respondent issued a check for P200,000.00 in favor of Sterela and instructed his wife to accompany Doronilla and their neighbor to open a savings account in Producers Bank. However, only the neighbor, private respondent's wife, and Doronilla's private secretary went to the bank to deposit the check. The bank manager informed private respondent that part of the money had been withdrawn and only P90,000.00 remained in the account. Private respondent received letters from Doronilla assuring him that his money was intact, but upon presentment of the checks, they were dishonored. Private respondent filed an action for recovery of the money against Doronilla, the neighbor, the secretary, and petitioner Producers Bank. The trial court ruled in favor of private respondent and petitioner appealed. The Court of Appeals affirmed the decision of the trial court.

Private respondent entered into a transaction with Doronilla, wherein private respondent deposited P200,000 in Sterela's savings account. Doronilla, the sole proprietor of Sterela, later withdrew from the account. Private respondent then sued petitioner bank for the return of his money, claiming that petitioner was liable for allowing Doronilla to withdraw. Petitioner argued that the transaction between private respondent and Doronilla was a simple loan (mutuum) and that it should not be held liable. Petitioner also claimed that its Assistant Manager was not at fault for allowing the withdrawal, as the authority to withdraw remained exclusively with Doronilla. The trial court ruled in favor of private respondent and held petitioner liable. The Court of Appeals affirmed the decision of the trial court. Petitioner now filed a petition before the Supreme Court, raising several issues including the nature of the transaction, petitioner's liability, and the factual findings of the trial court.

ISSUES:

  1. Whether the transaction between private respondent and Doronilla is a mutuum or an accommodation.

  2. Whether the petitioner, Atienza's employer, is liable for the return of private respondent's money.

  3. Whether petitioner, through its employee Mr. Atienza, was partly responsible for the loss of private respondent's money and is liable for its restitution.

  4. Whether the withdrawals made by Doronilla without presenting the passbook and the transfer of funds without the passbook being presented are in violation of petitioner's rules for savings deposits.

  5. Whether an employer-employee relationship exists between the petitioner and Atienza.

  6. Whether Atienza was acting within the scope of his assigned task when he assisted Doronilla in withdrawing funds and transferring them to Sterela's Current Account.

  7. Whether petitioner is liable for the loss suffered by Sterela.

RULING:

  1. The transaction between private respondent and Doronilla was a commodatum and not a mutuum. The Court of Appeals did not commit any error in ruling that way. The evidence shows that private respondent agreed to deposit his money in the savings account of Sterela for the purpose of making it appear that the firm had sufficient capitalization for incorporation, with the promise that the amount shall be returned within thirty (30) days. Private respondent merely "accommodated" Doronilla by lending his money without consideration. It was clear to the parties that the money would not be removed from Sterela's savings account and would be returned after thirty (30) days. This shows that it was a commodatum and not a mutuum.

  2. The petitioner, Atienza's employer, is solidarily liable for the return of private respondent's money. The nature of the transaction, whether it is a mutuum or a commodatum, does not affect the petitioner's liability. The factual circumstances of the case show that the petitioner, through Atienza, facilitated the opening of Sterela's current account after private respondent deposited money in its savings account. The petitioner also approved the authority to debit Sterela's savings account to cover any overdrawings in its current account. These acts show that the petitioner was involved in the transaction and thus, liable for the return of private respondent's money.

  3. Yes. The Court found that petitioner, through its employee Mr. Atienza, was partly responsible for the loss of private respondent's money and is liable for its restitution. Atienza allowed Doronilla to withdraw from the savings account without presenting the passbook, even though petitioner's rules for savings deposits expressly require the production of the passbook for any deposit or withdrawal. The Court held that Atienza facilitated the commission of the fraud and helped in devising the means to make the transactions appear in accordance with banking procedures.

  4. Yes. The withdrawals made by Doronilla without presenting the passbook and the transfer of funds without the passbook being presented are in violation of petitioner's rules for savings deposits. Petitioner's rules expressly state that withdrawals must be made by the depositor personally or upon his written authority, and that neither a deposit nor a withdrawal will be permitted without the production of the passbook. The Court found that Atienza, being aware that the passbook was in the possession of Mrs. Vives, allowed the withdrawals without requiring the presentation of the passbook and facilitated the transfer of funds without the passbook being presented.

  5. The Court of Appeals correctly held the following:

  6. An employer-employee relationship exists between the petitioner and Atienza.

  7. Atienza was acting within the scope of his assigned task when he assisted Doronilla in withdrawing funds and transferring them to Sterela's Current Account.

  8. Petitioner is liable for the loss suffered by Sterela and is solidarily liable with Doronilla and Dumagpi for the return of the P200,000.00.

PRINCIPLES:

  • Only questions of law may be raised in a petition for review. The Court's jurisdiction is limited to reviewing errors of law committed by the Court of Appeals. Factual findings of courts, when adopted and confirmed by the Court of Appeals, are final and conclusive unless they are not supported by the evidence on record.

  • The distinction between commodatum and mutuum is based on whether the borrower acquires ownership of the thing loaned. In commodatum, the bailor retains ownership, while in mutuum, ownership passes to the borrower. Commodatum is essentially gratuitous, while simple loan may be gratuitous or with stipulation to pay interest.

  • The intention of the parties is primary in determining the character of a contract. In case of doubt, contemporaneous and subsequent acts of the parties shall be considered.

  • A loan of consumable goods may still be a commodatum if the purpose of the contract is not the consumption of the object, such as when it is merely for exhibition.

  • The bailee in commodatum acquires the use of the thing loaned but not its fruits.

  • Bank employees can be held liable for their participation in fraudulent activities that lead to the loss of a customer's money.

  • Compliance with the bank's rules and procedures, such as the presentation of the passbook for withdrawals and transfers, is necessary to ensure the security of depositors' funds and prevent fraud.

  • Authorized signatories, as indicated in the signature card, are the only ones empowered to make withdrawals from a savings account.

  • Certification and documents that contain false information do not have legal effect and cannot justify unauthorized withdrawals or transfers.

  • 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.

  • 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 the employee may have failed in his duty to the employer and disobeyed the latter's instructions.