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    Producers Bank of The Philippines Vs CA

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    The Supreme Court ruled that the transaction between Franklin Vives and Doronilla was a commodatum, not a simple loan. Vives deposited money into the bank account of Sterela Marketing and Services, owned by Doronilla, to help with the corporation's incorporation. The money was to be returned to Vives within 30 days. As the money was not consumed and was to be returned, this constituted a commodatum, where ownership of the money remained with Vives. Attempts by Doronilla to return the money plus interest did not convert it to a mutuum, as the interest belonged to Vives per the rules on commodatum. The Court affirmed the lower courts' rulings holding Doronilla and others liable

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    Producers Bank of The Philippines Vs CA

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    Mac
    2K views2 pages
    The Supreme Court ruled that the transaction between Franklin Vives and Doronilla was a commodatum, not a simple loan. Vives deposited money into the bank account of Sterela Marketing and Services, owned by Doronilla, to help with the corporation's incorporation. The money was to be returned to Vives within 30 days. As the money was not consumed and was to be returned, this constituted a commodatum, where ownership of the money remained with Vives. Attempts by Doronilla to return the money plus interest did not convert it to a mutuum, as the interest belonged to Vives per the rules on commodatum. The Court affirmed the lower courts' rulings holding Doronilla and others liable

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    Producers Bank of the Philippines vs CA

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    The Supreme Court ruled that the transaction between Franklin Vives and Doronilla was a commodatum, not a simple loan. Vives deposited money into the bank account of Sterela Marketing and Services, owned by Doronilla, to help with the corporation's incorporation. The money was to be returned to Vives within 30 days. As the money was not consumed and was to be returned, this constituted a commodatum, where ownership of the money remained with Vives. Attempts by Doronilla to return the money plus interest did not convert it to a mutuum, as the interest belonged to Vives per the rules on commodatum. The Court affirmed the lower courts' rulings holding Doronilla and others liable

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views2 pages

    Producers Bank of The Philippines Vs CA

    Uploaded by

    Mac
    The Supreme Court ruled that the transaction between Franklin Vives and Doronilla was a commodatum, not a simple loan. Vives deposited money into the bank account of Sterela Marketing and Services, owned by Doronilla, to help with the corporation's incorporation. The money was to be returned to Vives within 30 days. As the money was not consumed and was to be returned, this constituted a commodatum, where ownership of the money remained with Vives. Attempts by Doronilla to return the money plus interest did not convert it to a mutuum, as the interest belonged to Vives per the rules on commodatum. The Court affirmed the lower courts' rulings holding Doronilla and others liable

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    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.

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