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    Digest - Javellana V Lim - GR 4015 (24 August 1908)

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    Rey Benitez
    This document summarizes a 1908 Supreme Court case regarding a contract between Angel Javellana and Jose Lim. The contract stated that Jose received 2,600.86 pesos from Angel as a "deposit" but later asked for an extension to repay the money and agreed to pay 15% annual interest. The Supreme Court ruled that the contract was not actually a deposit, but a loan (mutuum), because Jose was authorized to use the money and agreed to pay interest. The inclusion of interest payments and authorization to use the funds meant the contract lost the character of a deposit and was instead a loan.

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    © All Rights Reserved
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    Digest - Javellana V Lim - GR 4015 (24 August 1908)

    Uploaded by

    Rey Benitez
    2K views1 page
    This document summarizes a 1908 Supreme Court case regarding a contract between Angel Javellana and Jose Lim. The contract stated that Jose received 2,600.86 pesos from Angel as a "deposit" but later asked for an extension to repay the money and agreed to pay 15% annual interest. The Supreme Court ruled that the contract was not actually a deposit, but a loan (mutuum), because Jose was authorized to use the money and agreed to pay interest. The inclusion of interest payments and authorization to use the funds meant the contract lost the character of a deposit and was instead a loan.

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    Loan

    Original Title

    Digest - Javellana v Lim - GR 4015 (24 August 1908)

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    This document summarizes a 1908 Supreme Court case regarding a contract between Angel Javellana and Jose Lim. The contract stated that Jose received 2,600.86 pesos from Angel as a "deposit" but later asked for an extension to repay the money and agreed to pay 15% annual interest. The Supreme Court ruled that the contract was not actually a deposit, but a loan (mutuum), because Jose was authorized to use the money and agreed to pay interest. The inclusion of interest payments and authorization to use the funds meant the contract lost the character of a deposit and was instead a loan.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2K views1 page

    Digest - Javellana V Lim - GR 4015 (24 August 1908)

    Uploaded by

    Rey Benitez
    This document summarizes a 1908 Supreme Court case regarding a contract between Angel Javellana and Jose Lim. The contract stated that Jose received 2,600.86 pesos from Angel as a "deposit" but later asked for an extension to repay the money and agreed to pay 15% annual interest. The Supreme Court ruled that the contract was not actually a deposit, but a loan (mutuum), because Jose was authorized to use the money and agreed to pay interest. The inclusion of interest payments and authorization to use the funds meant the contract lost the character of a deposit and was instead a loan.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Credit Transactions, First Semestre (AY 2014 2015), Saturday (7PM 9PM), Atty. Crisostomo A.

    Uribe
    Bentez, Montilla, San Andres, Sia, Uyson


    Angel Javellana v Jose Lim, et al; GR 4015, 24 August 1908
    En banc, Torres, J.

    Facts:

    (1) On 26 May 1897, Jose and others executed a document in favor of Angel, wherein it
    stated that they had received a sum of PhP 2,600.86 as a deposit without interest
    from the latter. The document also stipulated that they would return the same amount
    jointly and severally on 20 January 1898.

    (2) Upon the stipulated due date, however, Jose and others asked for an extension to
    pay and bound themselves to pay 15% interest per annum on the amount of their
    indebtedness, to which the Angel acceded. Despite the extension, Jose and others
    still failed to pay the full amount of their indebtedness. Consequently, this prompted
    Angel to file a civil action before the CFI of Iloilo. The CFI of Iloilo subsequently ruled
    in favor of Angel to recover the amount due plus the payment of 15% interest per
    annum.

    Issue:

    Whether or not the contract executed by Angel and Jose and others was that of a
    deposit.

    Ruling:

    No, the contract executed by Angel and Jose and others was not a deposit. Instead, it
    was a contract of simple loan or mutuum.

    Ratio:

    (1) It must be understood that Jose and others were lawfully authorized to make use of
    the amount deposited, which they have done as subsequently shown when they
    asked for an extension of the time for the return thereof. They were conscious that
    they had used, for their own profit and gain, the money which they apparently
    received as a deposit. Moreover, they engaged to pay interest to Angel from the
    stipulated date until the time when the refund should have been made.

    (2) Where money, consisting of coins of legal tender, is deposited with a person and the
    latter is authorized by the depositor to use and dispose of the same, the agreement
    is not a contract of deposit, but a loan. Moreover, Article 1768 of the old Civil Code
    (now Article 1978 of the New Civil Code) provides that when the depository has per-
    mission to make use of the thing deposited, the contract loses the character of a de-
    posit and becomes a loan or bailment.

    (3) A subsequent agreement between the parties as to interest on the amount said to
    have been deposited, because the same could not be returned at the time fixed
    therefore, does not constitute a renewal of an agreement of deposit, but it is the best
    evidence that the original contract entered into between them was for a loan under
    the guise of a deposit.

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