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    ContentsPeople vs Concepcion ................................................................................................................................... 1

    Naguit vs CA .................................................................................................................................................. 6

    Catholic Vicar vs CA ....................................................................................................................................... 9

    Producers Bank vs CA .................................................................................................................................. 16

    People vs Concepcion

    G.R. No. L-19190 November 29, 1922 

    THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,vs.VENANCIO CONCEPCION, defendant-appellant.

    Recaredo Ma. Calvo for appellant. Attorney-General Villa-Real for appellee. 

    MALCOLM, J.:  

    By telegrams and a letter of confirmation to the manager of the Aparri branch of thePhilippine National Bank, Venancio Concepcion, President of the Philippine NationalBank, between April 10, 1919, and May 7, 1919, authorized an extension of credit infavor of "Puno y Concepcion, S. en C." in the amount of P300,000. This specialauthorization was essential in view of the memorandum order of President Concepciondated May 17, 1918, limiting the discretional power of the local manager at Aparri,Cagayan, to grant loans and discount negotiable documents to P5,000, which, in certaincases, could be increased to P10,000. Pursuant to this authorization, credit aggregatingP300,000, was granted the firm of "Puno y Concepcion, S. en C.," the only securityrequired consisting of six demand notes. The notes, together with the interest, weretaken up and paid by July 17, 1919.

    "Puno y Concepcion, S. en C." was a copartnership capitalized at P100,000. AnacletoConcepcion contributed P5,000; Clara Vda. de Concepcion, P5,000; Miguel S.Concepcion, P20,000; Clemente Puno, P20,000; and Rosario San Agustin, "casada con

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    Gral. Venancio Concepcion," P50,000. Member Miguel S. Concepcion was theadministrator of the company.

    On the facts recounted, Venancio Concepcion, as President of the Philippine NationalBank and as member of the board of directors of this bank, was charged in the Court of

    First Instance of Cagayan with a violation of section 35 of Act No. 2747. He was foundguilty by the Honorable Enrique V. Filamor, Judge of First Instance, and was sentencedto imprisonment for one year and six months, to pay a fine of P3,000, with subsidiaryimprisonment in case of insolvency, and the costs.

    Section 35 of Act No. 2747, effective on February 20, 1918, just mentioned, to whichreference must hereafter repeatedly be made, reads as follows: "The National Bankshall not, directly or indirectly, grant loans to any of the members of the board ofdirectors of the bank nor to agents of the branch banks." Section 49 of the same Actprovides: "Any person who shall violate any of the provisions of this Act shall bepunished by a fine not to exceed ten thousand pesos, or by imprisonment not to exceed

    five years, or by both such fine and imprisonment." These two sections were in effect in1919 when the alleged unlawful acts took place, but were repealed by Act No. 2938,approved on January 30, 1921.

    Counsel for the defense assign ten errors as having been committed by the trial court.These errors they have argued adroitly and exhaustively in their printed brief, and againin oral argument. Attorney-General Villa-Real, in an exceptionally accurate andcomprehensive brief, answers the proposition of appellant one by one.

    The question presented are reduced to their simplest elements in the opinion whichfollows:

    I. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S.en C." by Venancio Concepcion, President of the Philippine National Bank, a "loan"within the meaning of section 35 of Act No. 2747?

    Counsel argue that the documents of record do not prove that authority to make a loanwas given, but only show the concession of a credit. In this statement of fact, counsel iscorrect, for the exhibits in question speak of a "credito" (credit) and not of a " prestamo"(loan).

    The "credit" of an individual means his ability to borrow money by virtue of the

    confidence or trust reposed by a lender that he will pay what he may promise.(Donnell vs. Jones [1848], 13 Ala., 490; Bouvier's Law Dictionary.) A "loan" means thedelivery by one party and the receipt by the other party of a given sum of money, uponan agreement, express or implied, to repay the sum loaned, with or without interest.(Payne vs. Gardiner [1864], 29 N. Y., 146, 167.) The concession of a "credit"necessarily involves the granting of "loans" up to the limit of the amount fixed in the"credit,"

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    II. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S.en C.," by Venancio Concepcion, President of the Philippine National Bank, a "loan" ora "discount"?

    Counsel argue that while section 35 of Act No. 2747 prohibits the granting of a "loan," it

    does not prohibit what is commonly known as a "discount."

    In a letter dated August 7, 1916, H. Parker Willis, then President of the National Bank,inquired of the Insular Auditor whether section 37 of Act No. 2612 was intended to applyto discounts as well as to loans. The ruling of the Acting Insular Auditor, dated August11, 1916, was to the effect that said section referred to loans alone, and placed norestriction upon discount transactions. It becomes material, therefore, to discover thedistinction between a "loan" and a "discount," and to ascertain if the instant transactioncomes under the first or the latter denomination.

    Discounts are favored by bankers because of their liquid nature, growing, as they do,

    out of an actual, live, transaction. But in its last analysis, to discount a paper is only amode of loaning money, with, however, these distinctions: (1) In a discount, interest isdeducted in advance, while in a loan, interest is taken at the expiration of a credit; (2) adiscount is always on double-name paper; a loan is generally on single-name paper.

    Conceding, without deciding, that, as ruled by the Insular Auditor, the law covers loansand not discounts, yet the conclusion is inevitable that the demand notes signed by thefirm "Puno y Concepcion, S. en C." were not discount paper but were mere evidencesof indebtedness, because (1) interest was not deducted from the face of the notes, butwas paid when the notes fell due; and (2) they were single-name and not double-namepaper.

    The facts of the instant case having relation to this phase of the argument are notessentially different from the facts in the Binalbagan Estate case. Just as there it wasdeclared that the operations constituted a loan and not a discount, so should we herelay down the same ruling.

    III. Was the granting of a credit of P300,000 to the copartnership, "Puno y Concepcion,S. en C." by Venancio Concepcion, President of the Philippine National Bank, an"indirect loan" within the meaning of section 35 of Act No. 2747?

    Counsel argue that a loan to the partnership "Puno y Concepcion, S. en C." was not an

    "indirect loan." In this connection, it should be recalled that the wife of the defendantheld one-half of the capital of this partnership.

    In the interpretation and construction of statutes, the primary rule is to ascertain andgive effect to the intention of the Legislature. In this instance, the purpose of theLegislature is plainly to erect a wall of safety against temptation for a director of thebank. The prohibition against indirect loans is a recognition of the familiar maxim that noman may serve two masters — that where personal interest clashes with fidelity to duty

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    the latter almost always suffers. If, therefore, it is shown that the husband is financiallyinterested in the success or failure of his wife's business venture, a loan to partnershipof which the wife of a director is a member, falls within the prohibition.

    Various provisions of the Civil serve to establish the familiar relationship called a

    conjugal partnership. (Articles 1315, 1393, 1401, 1407, 1408, and 1412 can be speciallynoted.) A loan, therefore, to a partnership of which the wife of a director of a bank is amember, is an indirect loan to such director.

    That it was the intention of the Legislature to prohibit exactly such an occurrence isshown by the acknowledged fact that in this instance the defendant was tempted tomingle his personal and family affairs with his official duties, and to permit the loanP300,000 to a partnership of no established reputation and without asking for collateralsecurity.

    In the case of Lester and Wife vs. Howard Bank ([1870], 33 Md., 558; 3 Am. Rep., 211),

    the Supreme Court of Maryland said:

    What then was the purpose of the law when it declared that no director or officershould borrow of the bank, and "if any director," etc., "shall be convicted," etc.,"of directly or indirectly violating this section he shall be punished by fine andimprisonment?" We say to protect the stockholders, depositors and creditors ofthe bank, against the temptation to which the directors and officers might beexposed, and the power which as such they must necessarily possess in thecontrol and management of the bank, and the legislature unwilling to rely uponthe implied understanding that in assuming this relation they would not acquireany interest hostile or adverse to the most exact and faithful discharge of duty,

    declared in express terms that they should not borrow, etc., of the bank.

    In the case of People vs. Knapp ([1912], 206 N. Y., 373), relied upon in the BinalbaganEstate decision, it was said:

    We are of opinion the statute forbade the loan to his copartnership firm as well asto himself directly. The loan was made indirectly to him through his firm.

    IV. Could Venancio Concepcion, President of the Philippine National Bank, be convictedof a violation of section 35 of Act No. 2747 in relation with section 49 of the same Act,when these portions of Act No. 2747 were repealed by Act No. 2938, prior to the finding

    of the information and the rendition of the judgment?

     As noted along toward the beginning of this opinion, section 49 of Act No. 2747, inrelation to section 35 of the same Act, provides a punishment for any person who shallviolate any of the provisions of the Act. It is contended, however, by the appellant, thatthe repeal of these sections of Act No. 2747 by Act No. 2938 has served to take awaythe basis for criminal prosecution.

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    This same question has been previously submitted and has received an answeradverse to such contention in the cases of United Stated vs. Cuna  ([1908], 12 Phil.,241); People vs. Concepcion ([1922], 43 Phil., 653); and Ong Chang Wing and KwongFok vs.  United States ([1910], 218 U. S., 272; 40 Phil., 1046). In other words, it hasbeen the holding, and it must again be the holding, that where an Act of the Legislature

    which penalizes an offense, such repeals a former Act which penalized the sameoffense, such repeal does not have the effect of thereafter depriving the courts of jurisdiction to try, convict, and sentenced offenders charged with violations of the oldlaw.

    V. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion,S. en C." by Venancio Concepcion, President of the Philippine National Bank, inviolation of section 35 of Act No. 2747, penalized by this law?

    Counsel argue that since the prohibition contained in section 35 of Act No. 2747 is onthe bank, and since section 49 of said Act provides a punishment not on the bank when

    it violates any provisions of the law, but on a personviolating any provisions of thesame, and imposing imprisonment as a part of the penalty, the prohibition contained insaid section 35 is without penal sanction.lawph!l.net  

    The answer is that when the corporation itself is forbidden to do an act, the prohibitionextends to the board of directors, and to each director separately and individually.(People vs. Concepcion, supra.)

    VI. Does the alleged good faith of Venancio Concepcion, President of the PhilippineNational Bank, in extending the credit of P300,000 to the copartnership "Puno yConcepcion, S. en C." constitute a legal defense?

    Counsel argue that if defendant committed the acts of which he was convicted, it wasbecause he was misled by rulings coming from the Insular Auditor. It is furthermorestated that since the loans made to the copartnership "Puno y Concepcion, S. en C."have been paid, no loss has been suffered by the Philippine National Bank.

    Neither argument, even if conceded to be true, is conclusive. Under the statute whichthe defendant has violated, criminal intent is not necessarily material. The doing of theinhibited act, inhibited on account of public policy and public interest, constitutes thecrime. And, in this instance, as previously demonstrated, the acts of the President of thePhilippine National Bank do not fall within the purview of the rulings of the Insular

     Auditor, even conceding that such rulings have controlling effect.

    Morse, in his work, Banks and Banking, section 125, says:

    It is fraud for directors to secure by means of their trust, and advantage notcommon to the other stockholders. The law will not allow private profit from atrust, and will not listen to any proof of honest intent.

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    JUDGMENT

    On a review of the evidence of record, with reference to the decision of the trial court,and the errors assigned by the appellant, and with reference to previous decisions ofthis court on the same subject, we are irresistibly led to the conclusion that no reversible

    error was committed in the trial of this case, and that the defendant has been provedguilty beyond a reasonable doubt of the crime charged in the information. The penaltyimposed by the trial judge falls within the limits of the punitive provisions of the law.

    Judgment is affirmed, with the costs of this instance against the appellant. So ordered.

    Naguit vs CA

    [G.R. No. 137675. December 5, 2000] 

    NOVERNIA P. NAGUIT, peti t ioner, vs. THE COURT OF APPEALS, OSLER U.PADUA and NORBERTO B. MAGSAJO, respondents . 

    D E C I S I O N 

    GONZAGA-REYES, J .: 

    In a decision rendered on 15 October 1991, the Regional Trial Court (RTC) ofMakati, Branch 133, found Rolando Naguit liable for violation of Batas Pambansa Blg.22, and ordered him to idemnify private respondent Osler U. Padua in the amount ofP260,000.00 and to pay the costs of the action (Criminal Case No. 90-2645). A writ ofexecution was issued by said court on 23 June 1992 and pursuant thereto, respondentSheriff Norberto B. Magsajo levied upon a condominium unit covered by CondominiumCertificate of Title No. 7362 of the Registry of Deeds for the City of Makati, which noticeof levy was annotated at the back of the title. Consequently, the property was sold at apublic auction for P318,050.00 in favor of private respondent, as the highest bidder. Thecertificate of sale was issued in the name of private respondent and registered with theRegistry of Deeds on 25 August 1994. 

    On 8 August 1995, petitioner filed a complaint with the RTC of Makati againstprivate respondent Padua and respondent Sheriff Magsajo for the annulment of saleand for damages, with a prayer for the issuance of a writ of preliminary injunction inorder to enjoin the final conveyance of title over the condominium unit to privaterespondent (Civil Case No. 95-1182). Petitioner claimed that the debt contracted by herhusband did not redound to the benefit of the family, nor was it made with her consent,and therefore, should not be charged to the conjugal partnership of gains or to her

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    exclusive property; that the condominium unit levied upon and sold to privaterespondent is her exclusive property, not the judgment obligors; and that consequently,the levy and sale of the condominium unit are void.

    [1] 

    On 20 September 1995, Branch 136 of the RTC of Makati denied petitioners prayerfor the issuance of preliminary injunction, explaining that 

    The perceived anomaly in the auction sale of the property subject of this case, which [is]claimed to be owned by the petitioner is a matter within the competence of the Courtwhich authorized the levy on execution of judgment, of property of plaintiff in this case. 

    If plaintiff believes that there were irregularities in the auction sale of the propertysubject of this case which [is] claimed to be owned by the petitioner, the problemsshould have been threshed out before [the] RTC Makati, Branch 133, which courtauthorized the levy on execution of judgment of property of plaintiff in this case.Besides, the petitioner should have elevated the matter to the higher tribunal, and seekproper injunctive relief, and not to refer to this Court which does not exercise an

    appellate authority over the court that issued the aforesaid writ of execution. 

    The Court agrees with the argument of the defendant that the present action of theplaintiff in seeking relief with this Court is legally misplaced.  

    It is an elementary rule of procedure, which is too well settled to be ignored, that trialcourts have no power to interfere by injunction and are enjoined from intervening withthe proceedings of a co-equal, concurrent and coordinate court of the same

     jurisdiction.[2]

     

    On 5 July 1996, the trial court issued an order denying petitioners motion for

    reconsideration and dismissing the case on the ground of lack of jurisdiction.[3] TheCourt of Appeals upheld the trial courts decision to dismiss the case. In its decisionpromulgated on 18 November 1998, the appellate court explained that since petitioneris the spouse of the judgment debtor she cannot be considered a stranger to the casewherein the writ of execution was issued and thus, she should have presented her third-party claim therein. In the event that her claim is denied, only then should petitionerbring the matter before the appellate court.

    [4] Petitioner filed a motion for

    reconsideration, which was denied by the Court of Appeals on 9 February 1999.  

    Hence, the present petition, wherein petitioner asks that the 18 November 1998Decision and 9 February 1999 Resolution of the Court of Appeals be set aside and that

    the action for annulment of sale be tried on the merits.

    [5]

     The petition is imbued with merit. A third-party claimants right to bring an

    independent action to assert his claim of ownership over the properties seized issanctioned by Section 17 of Rule 39 of the old Rules of Civil Procedure, which providesthat 

    Proceedings where property claimed by third person. - If property levied on be claimedby any other person than the judgment debtor or his agent, and such person make an

    http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn1

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    affidavit of his title thereto or right to the possession thereof, stating the grounds of suchright or title, and serve the same upon the officer making the levy, and copy thereofupon the judgment creditor, the officer shall not be bound to keep the property, unlesssuch judgment creditor or his agent, on demand of the officer, indemnify the officeragainst such claim by a bond in a sum not greater than the value of the property levied

    on. In case of disagreement as to the value, the same shall be determined by the courtissuing the writ of execution. 

    The officer is not liable for damages, for the taking or keeping of the property, to anythird party claimant unless a claim is made by the latter and unless an action fordamages is brought by him against the officer within one hundred twenty (120) daysfrom the date ofthe filing of the bond. But nothing herein contained shall prevent suchclaimant or any third person from vindicating his claims to the property by any properaction. [emphasis supplied][6] 

    xxx xxx xxx 

    The proper action mentioned in Section 17 would have for its object the recovery ofownership or possession of the property seized by the sheriff, as well as damagesresulting from the allegedly wrongful seizure and detention thereof despite the thirdparty claim and it may be brought against the sheriff and such other parties as may bealleged to have colluded with him in the supposedly wrongful execution proceedings,such as the judgment creditor himself. If instituted by a stranger to the suit in whichexecution has issued, such proper action should be a totally separate and distinct actionfrom the former suit.[7] 

    In addition to the filing of a proper action, the third-party claimant may also avail ofthe remedy known as terceria, by executing an affidavit of his title or right of possession

    over the property seized and serving the same upon the officer making the levy and the judgment creditor. Thereafter, the officer shall not be bound to keep the property, unlessthe judgment creditor or his agent indemnifies the officer against such claim by a bondin a sum not greater than the value of the property levied on. An action for damagesmay be brought against the officer within one hundred twenty (120) days from the dateof the filing of the bond. 

    These abovementioned remedies are cumulative and any one of them may beresorted to by a third-party claimant without availing of the others. Thus, the availmentof the remedy of terceria is not a condition sine qua non to the filing of a proper action.

     An independent action may be resorted to even before or without need of filing a claimin the court which issued the writ.

    [8] 

    In the case at bar, petitioner filed an independent action for the annulment of thecertificate of sale issued in favor of private respondent, contending that the propertylevied upon and sold to private respondent by virtue of the writ of execution issued inCriminal Case No. 90-2645 was her exclusive property, not that of the judgmentobligor. Pursuant to our ruling in Sy v. Discaya,[9] petitioner is deemed a stranger to theaction wherein the writ of execution was issued and is therefore justified in bringing anindependent action to vindicate her right of ownership over the subject property. 

    http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/137675.htm#_edn6

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    Contrary to the stand taken by the trial court, the filing of such an independentaction cannot be considered an encroachment upon the jurisdiction of a co-equal andcoordinate court. The court issuing the writ of execution may enforce its authority onlyover properties of the judgment debtor; thus, the sheriff acts properly only when hesubjects to execution property undeniably belonging to the judgment debtor. If the

    sheriff levies upon the assets of a third person in which the judgment debtor has nointerest, then he is acting beyond the limits of his authority and is amenable to controland correction by a court of competent jurisdiction in a separate and independentaction.

    [10] This is in consonance with the well-established principle that no man shall be

    affected by any proceeding to which he is a stranger. Execution of a judgment can onlybe issued against a party to the action, and not against one who has not yet had his dayin court.

    [11] 

    WHEREFORE, the petition is GRANTED. The assailed decision and resolution ofthe Court of Appeals, promulgated on 18 November 1998 and 9 February 1999,respectively, are hereby SET ASIDE. This case is remanded to the trial court for furtherproceedings. 

    SO ORDERED. 

    Catholic Vicar vs CA

    G.R. No. 80294-95 September 21, 1988

    CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN PROVINCE, petitioner,vs.

    COURT OF APPEALS, HEIRS OF EGMIDIO OCTAVIANO AND JUANVALDEZ, respondents.

    Valdez, Ereso, Polido & Associates for petitioner.

    Claustro, Claustro, Claustro Law Office collaborating counsel for petitioner.

    Jaime G. de Leon for the Heirs of Egmidio Octaviano.

    Cotabato Law Office for the Heirs of Juan Valdez.

    GANCAYCO, J .:  

    The principal issue in this case is whether or not a decision of the Court of Appealspromulgated a long time ago can properly be considered res judicata by respondentCourt of Appeals in the present two cases between petitioner and two privaterespondents.

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    Petitioner questions as allegedly erroneous the Decision dated August 31, 1987 of theNinth Division of Respondent Court of Appeals

    1 in CA-G.R. No. 05148 [Civil Case No.

    3607 (419)] and CA-G.R. No. 05149 [Civil Case No. 3655 (429)], both for Recovery ofPossession, which affirmed the Decision of the Honorable Nicodemo T. Ferrer, Judge ofthe Regional Trial Court of Baguio and Benguet in Civil Case No. 3607 (419) and Civil

    Case No. 3655 (429), with the dispositive portion as follows:

    WHEREFORE, Judgment is hereby rendered ordering the defendant,Catholic Vicar Apostolic of the Mountain Province to return and surrenderLot 2 of Plan Psu-194357 to the plaintiffs. Heirs of Juan Valdez, and Lot 3of the same Plan to the other set of plaintiffs, the Heirs of EgmidioOctaviano (Leonardo Valdez, et al.). For lack or insufficiency of evidence,the plaintiffs' claim or damages is hereby denied. Said defendant isordered to pay costs. (p. 36, Rollo)

    Respondent Court of Appeals, in affirming the trial court's decision, sustained the trial

    court's conclusions that the Decision of the Court of Appeals, dated May 4,1977 in CA-G.R. No. 38830-R, in the two cases affirmed by the Supreme Court, touched on theownership of lots 2 and 3 in question; that the two lots were possessed by thepredecessors-in-interest of private respondents under claim of ownership in good faithfrom 1906 to 1951; that petitioner had been in possession of the same lots as bailee incommodatum up to 1951, when petitioner repudiated the trust and when it applied forregistration in 1962; that petitioner had just been in possession as owner for elevenyears, hence there is no possibility of acquisitive prescription which requires 10 yearspossession with just title and 30 years of possession without; that the principle of res

     judicata on these findings by the Court of Appeals will bar a reopening of thesequestions of facts; and that those facts may no longer be altered.

    Petitioner's motion for reconsideation of the respondent appellate court's Decision in thetwo aforementioned cases (CA G.R. No. CV-05418 and 05419) was denied.

    The facts and background of these cases as narrated by the trail court are as follows — 

    ... The documents and records presented reveal that thewhole controversy started when the defendant Catholic Vicar

     Apostolic of the Mountain Province (VICAR for brevity) filedwith the Court of First Instance of Baguio Benguet onSeptember 5, 1962 an application for registration of title overLots 1, 2, 3, and 4 in Psu-194357, situated at PoblacionCentral, La Trinidad, Benguet, docketed as LRC N-91, saidLots being the sites of the Catholic Church building,convents, high school building, school gymnasium, schooldormitories, social hall, stonewalls, etc. On March 22, 1963the Heirs of Juan Valdez and the Heirs of Egmidio Octavianofiled their Answer/Opposition on Lots Nos. 2 and 3,respectively, asserting ownership and title thereto. After trial

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    on the merits, the land registration court promulgated itsDecision, dated November 17, 1965, confirming theregistrable title of VICAR to Lots 1, 2, 3, and 4.

    The Heirs of Juan Valdez (plaintiffs in the herein Civil Case

    No. 3655) and the Heirs of Egmidio Octaviano (plaintiffs inthe herein Civil Case No. 3607) appealed the decision of theland registration court to the then Court of Appeals, docketedas CA-G.R. No. 38830-R. The Court of Appeals rendered itsdecision, dated May 9, 1977, reversing the decision of theland registration court and dismissing the VICAR'sapplication as to Lots 2 and 3, the lots claimed by the twosets of oppositors in the land registration case (and two setsof plaintiffs in the two cases now at bar), the first lot beingpresently occupied by the convent and the second by thewomen's dormitory and the sister's convent.

    On May 9, 1977, the Heirs of Octaviano filed a motion forreconsideration praying the Court of Appeals to order theregistration of Lot 3 in the names of the Heirs of EgmidioOctaviano, and on May 17, 1977, the Heirs of Juan Valdezand Pacita Valdez filed their motion for reconsiderationpraying that both Lots 2 and 3 be ordered registered in thenames of the Heirs of Juan Valdez and Pacita Valdez. On

     August 12,1977, the Court of Appeals denied the motion forreconsideration filed by the Heirs of Juan Valdez on theground that there was "no sufficient merit to justify

    reconsideration one way or the other ...," and likewise deniedthat of the Heirs of Egmidio Octaviano.

    Thereupon, the VICAR filed with the Supreme Court apetition for review on certiorari of the decision of the Court of

     Appeals dismissing his (its) application for registration ofLots 2 and 3, docketed as G.R. No. L-46832, entitled'Catholic Vicar Apostolic of the Mountain Province vs. Courtof Appeals and Heirs of Egmidio Octaviano.'

    From the denial by the Court of Appeals of their motion forreconsideration the Heirs of Juan Valdez and Pacita Valdez,on September 8, 1977, filed with the Supreme Court apetition for review, docketed as G.R. No. L-46872,entitled, Heirs of Juan Valdez and Pacita Valdez vs. Court of

     Appeals, Vicar, Heirs of Egmidio Octaviano and Annable O.Valdez.

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    On January 13, 1978, the Supreme Court denied in a minuteresolution both petitions (of VICAR on the one hand and theHeirs of Juan Valdez and Pacita Valdez on the other) forlack of merit. Upon the finality of both Supreme Courtresolutions in G.R. No. L-46832 and G.R. No. L- 46872, the

    Heirs of Octaviano filed with the then Court of First Instanceof Baguio, Branch II, a Motion For Execution of Judgmentpraying that the Heirs of Octaviano be placed in possessionof Lot 3. The Court, presided over by Hon. Salvador J.Valdez, on December 7, 1978, denied the motion on theground that the Court of Appeals decision in CA-G.R. No.38870 did not grant the Heirs of Octaviano any affirmativerelief.

    On February 7, 1979, the Heirs of Octaviano filed with theCourt of Appeals a petitioner for certiorari and mandamus,

    docketed as CA-G.R. No. 08890-R, entitled Heirs of EgmidioOctaviano vs. Hon. Salvador J. Valdez, Jr. and Vicar . In itsdecision dated May 16, 1979, the Court of Appealsdismissed the petition.

    It was at that stage that the instant cases were filed. TheHeirs of Egmidio Octaviano filed Civil Case No. 3607 (419)on July 24, 1979, for recovery of possession of Lot 3; andthe Heirs of Juan Valdez filed Civil Case No. 3655 (429) onSeptember 24, 1979, likewise for recovery of possession ofLot 2 (Decision, pp. 199-201, Orig. Rec.).

    In Civil Case No. 3607 (419) trial was held. The plaintiffs Heirs of EgmidioOctaviano presented one (1) witness, Fructuoso Valdez, who testified onthe alleged ownership of the land in question (Lot 3) by their predecessor-in-interest, Egmidio Octaviano (Exh. C ); his written demand (Exh. B—B-4) to defendant Vicar for the return of the land to them; and the reasonablerentals for the use of the land at P10,000.00 per month. On the otherhand, defendant Vicar presented the Register of Deeds for the Province ofBenguet, Atty. Nicanor Sison, who testified that the land in question is notcovered by any title in the name of Egmidio Octaviano or any of theplaintiffs (Exh. 8). The defendant dispensed with the testimony ofMons.William Brasseur when the plaintiffs admitted that the witness ifcalled to the witness stand, would testify that defendant Vicar has been inpossession of Lot 3, for seventy-five (75) years continuously andpeacefully and has constructed permanent structures thereon.

    In Civil Case No. 3655, the parties admitting that the material facts are notin dispute, submitted the case on the sole issue of whether or not thedecisions of the Court of Appeals and the Supreme Court touching on the

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    ownership of Lot 2, which in effect declared the plaintiffs the owners of theland constitute res judicata. 

    In these two cases , the plaintiffs arque that the defendant Vicar is barredfrom setting up the defense of ownership and/or long and continuous

    possession of the two lots in question since this is barred by prior judgment of the Court of Appeals in CA-G.R. No. 038830-R under theprinciple of res judicata. Plaintiffs contend that the question of possessionand ownership have already been determined by the Court of Appeals(Exh. C, Decision, CA-G.R. No. 038830-R) and affirmed by the SupremeCourt (Exh. 1, Minute Resolution of the Supreme Court). On his part,defendant Vicar maintains that the principle of res judicata would notprevent them from litigating the issues of long possession and ownershipbecause the dispositive portion of the prior judgment in CA-G.R. No.038830-R merely dismissed their application for registration and titling oflots 2 and 3. Defendant Vicar contends that only the dispositive portion of

    the decision, and not its body, is the controlling pronouncement of theCourt of Appeals. 2 

    The alleged errors committed by respondent Court of Appeals according to petitionerare as follows:

    1. ERROR IN APPLYING LAW OF THE CASE AND RES JUDICATA;

    2. ERROR IN FINDING THAT THE TRIAL COURT RULED THAT LOTS 2 AND 3WERE ACQUIRED BY PURCHASE BUT WITHOUT DOCUMENTARY EVIDENCEPRESENTED;

    3. ERROR IN FINDING THAT PETITIONERS' CLAIM IT PURCHASED LOTS 2 AND 3FROM VALDEZ AND OCTAVIANO WAS AN IMPLIED ADMISSION THAT THEFORMER OWNERS WERE VALDEZ AND OCTAVIANO;

    4. ERROR IN FINDING THAT IT WAS PREDECESSORS OF PRIVATERESPONDENTS WHO WERE IN POSSESSION OF LOTS 2 AND 3 AT LEAST FROM1906, AND NOT PETITIONER;

    5. ERROR IN FINDING THAT VALDEZ AND OCTAVIANO HAD FREE PATENT APPLICATIONS AND THE PREDECESSORS OF PRIVATE RESPONDENTS

     ALREADY HAD FREE PATENT APPLICATIONS SINCE 1906;

    6. ERROR IN FINDING THAT PETITIONER DECLARED LOTS 2 AND 3 ONLY IN1951 AND JUST TITLE IS A PRIME NECESSITY UNDER ARTICLE 1134 INRELATION TO ART. 1129 OF THE CIVIL CODE FOR ORDINARY ACQUISITIVEPRESCRIPTION OF 10 YEARS;

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    7. ERROR IN FINDING THAT THE DECISION OF THE COURT OF APPEALS IN CAG.R. NO. 038830 WAS AFFIRMED BY THE SUPREME COURT;

    8. ERROR IN FINDING THAT THE DECISION IN CA G.R. NO. 038830 TOUCHED ONOWNERSHIP OF LOTS 2 AND 3 AND THAT PRIVATE RESPONDENTS AND THEIR

    PREDECESSORS WERE IN POSSESSION OF LOTS 2 AND 3 UNDER A CLAIM OFOWNERSHIP IN GOOD FAITH FROM 1906 TO 1951;

    9. ERROR IN FINDING THAT PETITIONER HAD BEEN IN POSSESSION OF LOTS 2 AND 3 MERELY AS BAILEE BOR ROWER) IN COMMODATUM, A GRATUITOUSLOAN FOR USE;

    10. ERROR IN FINDING THAT PETITIONER IS A POSSESSOR AND BUILDER INGOOD FAITH WITHOUT RIGHTS OF RETENTION AND REIMBURSEMENT AND ISBARRED BY THE FINALITY AND CONCLUSIVENESS OF THE DECISION IN CA G.R.NO. 038830. 3 

    The petition is bereft of merit.

    Petitioner questions the ruling of respondent Court of Appeals in CA-G.R. Nos. 05148and 05149, when it clearly held that it was in agreement with the findings of the trialcourt that the Decision of the Court of Appeals dated May 4,1977 in CA-G.R. No.38830-R, on the question of ownership of Lots 2 and 3, declared that the said Court of

     Appeals Decision CA-G.R. No. 38830-R) did not positively declare private respondentsas owners of the land, neither was it declared that they were not owners of the land, butit held that the predecessors of private respondents were possessors of Lots 2 and 3,with claim of ownership in good faith from 1906 to 1951. Petitioner was in possession as

    borrower in commodatum up to 1951, when it repudiated the trust by declaring theproperties in its name for taxation purposes. When petitioner applied for registration ofLots 2 and 3 in 1962, it had been in possession in concept of owner only for elevenyears. Ordinary acquisitive prescription requires possession for ten years, but alwayswith just title. Extraordinary acquisitive prescription requires 30 years. 4 

    On the above findings of facts supported by evidence and evaluated by the Court of Appeals in CA-G.R. No. 38830-R, affirmed by this Court, We see no error in respondentappellate court's ruling that said findings are res judicata between the parties. They canno longer be altered by presentation of evidence because those issues were resolvedwith finality a long time ago. To ignore the principle of res judicata would be to open the

    door to endless litigations by continuous determination of issues without end.

     An examination of the Court of Appeals Decision dated May 4, 1977, First Division 5 inCA-G.R. No. 38830-R, shows that it reversed the trial court's Decision 6 findingpetitioner to be entitled to register the lands in question under its ownership, on itsevaluation of evidence and conclusion of facts.

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    The Court of Appeals found that petitioner did not meet the requirement of 30 yearspossession for acquisitive prescription over Lots 2 and 3. Neither did it satisfy therequirement of 10 years possession for ordinary acquisitive prescription because of theabsence of just title. The appellate court did not believe the findings of the trial court thatLot 2 was acquired from Juan Valdez by purchase and Lot 3 was acquired also by

    purchase from Egmidio Octaviano by petitioner Vicar because there was absolutely nodocumentary evidence to support the same and the alleged purchases were nevermentioned in the application for registration.

    By the very admission of petitioner Vicar, Lots 2 and 3 were owned by Valdez andOctaviano. Both Valdez and Octaviano had Free Patent Application for those lots since1906. The predecessors of private respondents, not petitioner Vicar, were in possessionof the questioned lots since 1906.

    There is evidence that petitioner Vicar occupied Lots 1 and 4, which are not in question,but not Lots 2 and 3, because the buildings standing thereon were only constructed

    after liberation in 1945. Petitioner Vicar only declared Lots 2 and 3 for taxation purposesin 1951. The improvements oil Lots 1, 2, 3, 4 were paid for by the Bishop but saidBishop was appointed only in 1947, the church was constructed only in 1951 and thenew convent only 2 years before the trial in 1963.

    When petitioner Vicar was notified of the oppositor's claims, the parish priest offered tobuy the lot from Fructuoso Valdez. Lots 2 and 3 were surveyed by request of petitionerVicar only in 1962.

    Private respondents were able to prove that their predecessors' house was borrowed bypetitioner Vicar after the church and the convent were destroyed. They never asked for

    the return of the house, but when they allowed its free use, they became bailorsin commodatum and the petitioner the bailee. The bailees' failure to return the subjectmatter of commodatum to the bailor did not mean adverse possession on the part of theborrower. The bailee held in trust the property subject matter of commodatum. Theadverse claim of petitioner came only in 1951 when it declared the lots for taxationpurposes. The action of petitioner Vicar by such adverse claim could not ripen into titleby way of ordinary acquisitive prescription because of the absence of just title.

    The Court of Appeals found that the predecessors-in-interest and private respondentswere possessors under claim of ownership in good faith from 1906; that petitioner Vicarwas only a bailee in commodatum; and that the adverse claim and repudiation of trustcame only in 1951.

    We find no reason to disregard or reverse the ruling of the Court of Appeals in CA-G.R.No. 38830-R. Its findings of fact have become incontestible. This Court declined toreview said decision, thereby in effect, affirming it. It has become final and executory along time ago.

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    Respondent appellate court did not commit any reversible error, much less grave abuseof discretion, when it held that the Decision of the Court of Appeals in CA-G.R. No.38830-R is governing, under the principle of res judicata, hence the rule, in the presentcases CA-G.R. No. 05148 and CA-G.R. No. 05149. The facts as supported by evidenceestablished in that decision may no longer be altered.

    WHEREFORE AND BY REASON OF THE FOREGOING, this petition is DENIED forlack of merit, the Decision dated Aug. 31, 1987 in CA-G.R. Nos. 05148 and 05149, byrespondent Court of Appeals is AFFIRMED, with costs against petitioner.

    SO ORDERED.

    Producers Bank vs CA

    [G.R. No. 115324. February 19, 2003]

    PRODUCERS BANK OF THE PHILIPPINES (now FIRST INTERNATIONALBANK), peti t ioner, vs. HON. COURT OF APPEALS AND FRANKLINVIVES, respondents .

    D E C I S I O N

    CALLEJO, SR., J .:

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

     of the Court of Appealsdated 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 petitionerProducers Bank of the Philippines.

    Sometime in 1979, private respondent Franklin Vives was asked by his neighborand friend Angeles Sanchez to help her friend and townmate, Col. Arturo Doronilla, inincorporating his business, the Sterela Marketing and Services (Sterela forbrevity). 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. Sheassured private respondent that he could withdraw his money from said account withina months time. Private respondent asked Sanchez to bring Doronilla to their house sothat they could discuss Sanchezs request.[3] 

    On May 9, 1979, private respondent, Sanchez, Doronilla and a certain EstrellaDumagpi, Doronillas private secretary, met and discussed the matter. Thereafter,relying on the assurances and representations of Sanchez and Doronilla, private

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    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. InocenciaVives, to accompany Doronilla and Sanchez in opening a savings account in the nameof 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 hercompanions, in coordination with Mr. Rufo Atienza, to open an account for SterelaMarketing Services in the amount of P200,000.00. In opening the account, theauthorized signatories were Inocencia Vives and/or Angeles Sanchez. A passbook forSavings Account No. 10-1567 was thereafter issued to Mrs. Vives.[4] 

    Subsequently, private respondent learned that Sterela was no longer holding officein the address previously given to him. Alarmed, he and his wife went to the Bank toverify 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 P90,000.00remained therein. He likewise told them that Mrs. Vives could not withdraw said

    remaining amount because it had to answer for some postdated checks issued byDoronilla. According to Atienza, after Mrs. Vives and Sanchez opened Savings AccountNo. 10-1567, Doronilla opened Current Account No. 10-0320 for Sterela and authorizedthe Bank to debit Savings Account No. 10-1567 for the amounts necessary to coveroverdrawings 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 paymentthereof, Doronilla issued three postdated checks, all of which were dishonored. Atienzaalso 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 intactand would be returned to him. On August 13, 1979, Doronilla issued a postdated checkfor Two Hundred Twelve Thousand Pesos (P212,000.00) in favor of privaterespondent. However, upon presentment thereof by private respondent to the draweebank, the check was dishonored. Doronilla requested private respondent to present thesame check on September 15, 1979 but when the latter presented the check, it wasagain dishonored.[6] 

    Private respondent referred the matter to a lawyer, who made a written demandupon Doronilla for the return of his clients money. Doronilla issued another checkfor P212,000.00 in private respondents favor but the check was again dishonored forinsufficiency of funds.[7] 

    Private respondent instituted an action for recovery of sum of money in the RegionalTrial Court (RTC) in Pasig, Metro Manila against Doronilla, Sanchez, Dumagpi andpetitioner. The case was docketed as Civil Case No. 44485. He also filed criminalactions against Doronilla, Sanchez and Dumagpi in the RTC. However, Sanchezpassed away on March 16, 1985 while the case was pending before the trial court. OnOctober 3, 1995, the RTC of Pasig, Branch 157, promulgated its Decision in Civil CaseNo. 44485, the dispositive portion of which reads:

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    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 attorneys fees; and

    (d) the costs of the suit.

    SO ORDERED.[8]

     

    Petitioner appealed the trial courts 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]

     Itlikewise denied with finality petitioners motion for reconsideration in its Resolution datedMay 5, 1994.

    [10] 

    On June 30, 1994, petitioner filed the present petition, arguing that

    I.

    THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING THAT THETRANSACTION BETWEEN THE DEFENDANT DORONILLA AND RESPONDENT VIVESWAS ONE OF SIMPLE LOAN AND NOT ACCOMMODATION;

    II.

    THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING THAT PETITIONERSBANK 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 UNDERTHE PRINCIPLE OF NATURAL JUSTICE;

    III.

    THE HONORABLE COURT OF APPEALS ERRED IN ADOPTING THE ENTIRE

    RECORDS OF THE REGIONAL TRIAL COURT AND AFFIRMING THE JUDGMENTAPPEALED 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 CITEDDECISION IN SALUDARES VS. MARTINEZ, 29 SCRA 745, UPHOLDING THE

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    LIABILITY OF AN EMPLOYER FOR ACTS COMMITTED BY AN EMPLOYEE IS

    APPLICABLE;

    V.

    THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING THE DECISION OFTHE 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 FORMORAL DAMAGES, P50,000.00 FOR EXEMPLARY DAMAGES, P40,000.00 FOR

    ATTORNEYS FEES AND THE COSTS OF SUIT.[11]

     

    Private respondent filed his Comment on September 23, 1994. Petitioner filed itsReply thereto on September 25, 1995. The Court then required private respondent tosubmit a rejoinder to the reply. However, said rejoinder was filed only on April 21, 1997,due to petitioners 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 tosubmit 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 isa simple loan (mutuum) since all the elements of a mutuum are present: first, what wasdelivered by private respondent to Doronilla was money, a consumable thing; andsecond, the transaction was onerous as Doronilla was obliged to pay interest, asevidenced by the check issued by Doronilla in the amount of P212,000.00, or P12,000more than what private respondent deposited in Sterelas 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 hada business angle to it. Hence, petitioner argues that it cannot be held liable for thereturn of private respondentsP200,000.00 because it is not privy to the transactionbetween the latter and Doronilla.

    [16] 

    It argues further that petitioners Assistant Manager, Mr. Rufo Atienza, could not befaulted for allowing Doronilla to withdraw from the savings account of Sterela since thelatter was the sole proprietor of said company. Petitioner asserts that Doronillas May 8,1979 letter addressed to the bank, authorizing Mrs. Vives and Sanchez to open asavings account for Sterela, did not contain any authorization for these two to withdrawfrom 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 thesavings account.[17] Petitioner points out that no evidence other than the testimonies ofprivate respondent and Mrs. Vives was presented during trial to prove that privaterespondent deposited hisP200,000.00 in Sterelas account for purposes of itsincorporation.

    [18] Hence, petitioner should not be held liable for allowing Doronilla to

    withdraw from Sterelas savings account.

    Petitioner also asserts that the Court of Appeals erred in affirming the trial courtsdecision since the findings of fact therein were not accord with the evidence presented

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    by petitioner during trial to prove that the transaction between private respondent andDoronilla was a mutuum, and that it committed no wrong in allowing Doronilla towithdraw from Sterelas savings account.

    [19] 

    Finally, petitioner claims that since there is no wrongful act or omission on its part, itis 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 attorneys fees.[20] 

    Private respondent, on the other hand, argues that the transaction between him andDoronilla is not a mutuum but an accommodation,[21] since he did not actually part withthe ownership of his P200,000.00 and in fact asked his wife to deposit said amount inthe account of Sterela so that a certification can be issued to the effect that Sterela hadsufficient funds for purposes of its incorporation but at the same time, he retained somedegree of control over his money through his wife who was made a signatory to thesavings 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, Atienzasemployer, is liable for the return of his money. He insists that Atienza, petitioners

    assistant manager, connived with Doronilla in defrauding private respondent since itwas Atienza who facilitated the opening of Sterelas current account three days afterMrs. Vives and Sanchez opened a savings account with petitioner for said company, aswell as the approval of the authority to debit Sterelas savings account to cover anyoverdrawings 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 apetition for review filed with this Court. The Court has repeatedly held that it is not itsfunction to analyze and weigh all over again the evidence presented by the partiesduring trial.

    [24] The Courts jurisdiction is in principle limited to reviewing errors of law that

    might have been committed by the Court of Appeals.[25] Moreover, factual findings ofcourts, when adopted and confirmed by the Court of Appeals, are final and conclusiveon this Court unless these findings are not supported by the evidence onrecord.[26] There is no showing of any misapprehension of facts on the part of the Courtof Appeals in the case at bar that would require this Court to review and overturn thefactual 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 theevidence on record.

    No error was committed by the Court of Appeals when it ruled that the transactionbetween private respondent and Doronilla was a commodatum  and not a mutuum. A

    circumspect examination of the records reveals that the transaction between them wasacommodatum. Article 1933 of the Civil Code distinguishes between the two kinds ofloans in this wise:

    By the contract of loan, one of the parties delivers to another, either something not consumableso 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

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    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 aconsumable thing, such as money, the contract would be a mutuum. However, there aresome instances where a commodatum may have for its object a consumablething. 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 theintention of the parties is to lend consumable goods and to have the very same goodsreturned at the end of the period agreed upon, the loan is a commodatum and nota mutuum.

    The rule is that the intention of the parties thereto shall be accorded primordialconsideration in determining the actual character of a contract.[27] In case of doubt, thecontemporaneous and subsequent acts of the parties shall be considered in suchdetermination.

    [28] 

     As correctly pointed out by both the Court of Appeals and the trial court, theevidence shows that private respondent agreed to deposit his money in the savingsaccount of Sterela specifically for the purpose of making it appear that said firm hadsufficient capitalization for incorporation, with the promise that the amount shall bereturned within thirty (30) days.[29] Private respondent merely accommodated Doronillaby lending his money without consideration, as a favor to his good friend Sanchez. Itwas however clear to the parties to the transaction that the money would not beremoved from Sterelas savings account and would be returned to private respondentafter thirty (30) days.

    Doronillas attempts to return to private respondent the amount of P200,000.00which the latter deposited in Sterelas account together with an additional P12,000.00,

    allegedly representing interest on the mutuum, did not convert the transaction fromacommodatum into a mutuum because such was not the intent of the parties andbecause the additional P12,000.00 corresponds to the fruits of the lending ofthe P200,000.00. Article 1935 of the Civil Code expressly states that [t]he baileein commodatum acquires the use of the thing loaned but not its fruits. Hence, it was onlyproper for Doronilla to remit to private respondent the interest accruing to the lattersmoney deposited with petitioner.

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    Neither does the Court agree with petitioners contention that it is not solidarily liablefor the return of private respondents money because it was not privy to the transactionbetween 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 petitionersliability for the return of private respondents money because the factual circumstances

    of the case clearly show that petitioner, through its employee Mr. Atienza, was partlyresponsible for the loss of private respondents money and is liable for its restitution.

    Petitioners rules for savings deposits written on the passbook it issued Mrs. Viveson 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 Bankthe 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 withdrawtherefrom even without presenting the passbook (which Atienza very well knew was inthe 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 wasparty to Doronillas scheme of defrauding private respondent:

    X X X

    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 ofthe 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 insuch manner as to make it appear that the transaction was in accordance with banking procedure.

    To begin with, the deposit was made in defendants Buendia branch precisely because Atienzawas 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 defendants branch in 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 theBuendia 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 x x x (Exh. 1). This is a clear manifestation that the other

    defendants had been in consultation with Atienza from the inception of thescheme. 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 toDoronilla nor to Sterela. Aside from such foreknowledge, he was explicitly told by Inocencia

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    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 InocenciaVives &/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 notfollowed 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 Doronillaso 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. Vivesnor 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 loanaccommodation 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 currentaccounts 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 Atienzas

    active participation in the perpetration of the fraud and deception that caused the loss. Therecords 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 thesavings 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. x x

    x.[31]

     

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    Under Article 2180 of the Civil Code, employers shall be held primarily and solidarilyliable for damages caused by their employees acting within the scope of their assignedtasks. To hold the employer liable under this provision, it must be shown that anemployer-employee relationship exists, and that the employee was acting within thescope 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 itsemployee is responsible to the injured party for damages flowing from the employeeswrongful 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 lattersinstructions.[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 fromSterelas Savings Account No. 10-1567, in which account private respondents moneywas deposited, and in transferring the money withdrawn to Sterelas Current Accountwith petitioner. Atienzas acts of helping Doronilla, a customer of the petitioner, were

    obviously done in furtherance of petitioners interests[34] even though in the process, Atienza violated some of petitioners rules such as those stipulated in its savingsaccount passbook.[35] It was established that the transfer of funds from Sterelas savingsaccount to its current account could not have been accomplished by Doronilla withoutthe invaluable assistance of Atienza, and that it was their connivance which was thecause of private respondents loss.

    The foregoing shows that the Court of Appeals correctly held that under Article 2180of the Civil Code, petitioner is liable for private respondents loss and is solidarily liablewith Doronilla and Dumagpi for the return of the P200,000.00 since it is clear thatpetitioner failed to prove that it exercised due diligence to prevent the unauthorized

    withdrawals from Sterelas savings account, and that it was not negligent in the selectionand supervision of Atienza. Accordingly, no error was committed by the appellate courtin the award of actual, moral and exemplary damages, attorneys fees and costs of suitto private respondent.

    WHEREFORE, the petition is hereby DENIED. The assailed Decision andResolution of the Court of Appeals are AFFIRMED.

    SO ORDERED.

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