Producers Bank Of The Philippines (Now First International Bank), Petitioner, Vs. Hon.

Court Of Appeals And Franklin Vives, Respondents. G.R. No. 115324 | 2003-02-19

DOCTRINE:
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.

FACTS:
Sanchez asked Franklin Vives to deposit in a bank a certain amount of money in the
bank account of Sterela Marketing and Services for purposes of its incorporation, the
corporation was owned by Doronilla. Sanchez assured Vives that he could withdraw the money
from the account of Sterela a month’s time. Thereafter, relying on the assurances and
representations of Sanchez and Doronilla, Vives issued a check in favor of Sterela. The check
was deposited to the newly opened savings account of Sterela Marketing and Services in the
Producers Bank of the Philippines (Producers). The passbook, given to the wife of Vives, had an
instruction that no withdrawals/deposits will be allowed unless the passbook is presented. The
authorized signatories of said account were Mrs. Vives and/or Sanchez. Subsequently, Vives
learned that Sterela was no longer holding office in the address previously given to him.
Alarmed, he and his wife went to the Producers to verify if their money was still intact. They
were informed that part of the money in account had been withdrawn by Doronilla and could
not withdraw said remaining amount because it had to answer for some postdated checks
issued by Doronilla. Vives tried to get in touch with Doronilla through Sanchez. He received a
letter from Doronilla, assuring him that his money was intact and would be returned to him.
Doronilla issued a postdated check in favor Vives. However,
uponpresentmentthereoftothedraweebank,thecheckwasdishonored. Vivesfiledanaction for
recovery of sum of money in the RTC against Doronilla, Sanchez, Dumagpi and Producers. RTC
ruled in favor of Vives holding Doronila, Dumagpi and Producers jointly and severally liable and
ordered the payment thereof.

ISSUE:
Whether the transaction between Vives and Doronilla is a simple loan (mutuum)

HELD: No
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
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. 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 30 days. Vives 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.