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.

FACTS

Franklin Vives, upon the request of friends, issued a check for ₱200,000.00 to assist in incorporating Sterela Marketing and Services owned by Col. Arturo Doronilla. The check was deposited in a savings account at Producers Bank under Sterela’s name, with Vives’s wife and a friend, Angeles Sanchez, as authorized signatories. Vives later discovered Sterela had vacated its office. Upon inquiry at the bank, assistant manager Rufo Atienza informed him that a significant portion of the savings deposit had been withdrawn by Doronilla to cover overdrafts in a separate current account Doronilla had opened for Sterela, and that the remaining balance could not be withdrawn as it was set aside for dishonored checks issued by Doronilla.
Vives made demands for the return of his money. Doronilla issued checks to Vives, but these were dishonored. Vives filed a civil case for sum of money against Doronilla, his secretary Estrella Dumagpi, Sanchez, and Producers Bank. The Regional Trial Court held Doronilla, Dumagpi, and the Bank jointly and severally liable to Vives. The Court of Appeals affirmed this decision.

ISSUE

Whether petitioner Producers Bank is solidarily liable for the loss of Vives’s deposited funds.

RULING

Yes, the Supreme Court affirmed the Bank’s solidary liability. The legal logic rests on the Bank’s negligence and the application of Article 2180 of the Civil Code on employer liability. The transaction between Vives and Doronilla was correctly characterized by the lower courts as a simple loan, creating a creditor-debtor relationship between them. However, the Bank’s liability stems from its own separate acts. The evidence established that bank assistant manager Rufo Atienza actively facilitated the unauthorized transfer of funds from the savings account (where Vives’s wife was a signatory) to Doronilla’s current account, enabling the misappropriation. Atienza’s acts, performed within the scope of his apparent authority as a bank officer, constituted negligence for which the Bank is responsible.
The Bank failed to prove it exercised the due diligence required in the selection and supervision of its employee. Atienza’s actions, which violated bank rules, were done in furtherance of the Bank’s interest in accommodating its client Doronilla, thus falling within the scope of his functions. Consequently, under the principle of respondeat superior, the Bank is liable for the damages resulting from its employee’s wrongful acts. The Bank’s failure to safeguard the funds deposited under its care, through Atienza’s connivance with Doronilla, directly caused Vives’s loss, justifying the award of actual, moral, and exemplary damages, attorney’s fees, and costs.