PRODUCERS BANK OF THE PHILIPPINES v CA ARIANNE

Date: February 19, 2003

Ponente: Callejo, Sr., J.
Doctrine: Art. 1936 of CC provides that "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 the intention of the parties is to lend
consumable goods & to have the very same goods returned at the end of the period agreed upon, the loan is a commodatum & not mutuum. 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 & subsequent acts of the parties shall be considered in such determination.
Facts:
Private respondent Franklin Vives was asked by his neighbor & friend Angeles Sanchez to help her friend Col. Arturo Doronilla in incorporating his business Sterela
Marketing & Services. Sanchez asked Franklin Vives to deposit in a bank a certain amopunt of money in the bank accoun t of Sterela for purposes of its
incorporation w/ the assurance made to Vives that the latter could withdraw his money from said account within a month. When Franklin Vives, Sanchez, Doronilla
& his secretary Dumagpi met, Franklin Vives issued a P200,000 check in favor of Sterela. Franklin Vives instructed his wife Inocencia Vives to accompany Doronila
& Sanchez in opening a savings account in the name of Sterela in the Buendia, Makati Branch of Producer's Bank.
Sanchez, Mrs. Vives & Dumagpi went to the bank to deposit the check. They had w/ them an auhorization letter from Doronilla authorizing Sanchez & her
companions "in coordination w/ Mr. Rufo Atienza," to open an account for Sterela in the amount of P200,000.
Franklin Vives then learned that Doronilla was no longer holding office in the address given to him. The Spouses Vives went to the bank to verify if the money was
still intact but they were informed by the Assistant Manager Atienza that part of the money in the savings account was withdrwan & there was only an amount
of P90,000 remaining. They were also told that Mrs. Vives could not withdraw the remaining because it had to answer for some postdated checks issued by
Doronilla. Atienza said that Doronilla opened a current account for Sterelea & authorized the Bank to debit the savings account for the amounts necessary to
cover the overdrawings.
Franklin Vives communicated w/ Doronilla through Sanchez . Doronilla indicated through a letter that the mnoney was still intact & would be returned to Vives.
Thus, Doronilla issued a postdated check for P212,000 in favor of Franklin Vives but it was dishonored. Upon Doronilla's request, Vives presented the check again
to the drawee bank but it was again dishonored. Vives then referred the matter to a lawyer who made the written demand upon Doronilla. Doronilla issued a
check for P212, 000 in favor of Vives but it was dishonored. Thus, action for recovery of sum of money at the RTC against Doronilla, Sanchez, Dumagpi & Producers
Bank. Pending RTC decision, Sanchez died.
RTC: Producers Bank, Doronilla & Dumagpi are jointly & severally liable to pay Franklin Vives the amount of P200,000 (money deposited) w/ interest at the legal
rate from the filing of complaint until the same is fully paid.
CA: affirm in toto RTC decision
Producers Bank's contention: CA erred in ruling that the transaction is one of accomodation & not simple loan (Blockmates, there seems to be an error w/ the
original, p. 655 because it was provided there that RTC & CA held that the transaction was one of simple loan but the subsequent paragraphs show the contrary)
The transaction between Vives & Doronilla is a simple loan (mutuum) because the requisites of simple loan are present: (1) what was delivered by F. Vives to
Doronilla was money, a consumable thing; (2) the transaction was onerous as Doronilla was obliged to pay interest & the fact that F. Vives sued his good friend
Sachez shows that the transaction was not merely gratuitous but had a business angle to it. Thus, Producers Bank cannot be liable since it is not privy to the
transaction between Vives & Doronilla
Franklin Vives: The transaction is not a simple loan but merely an accomodation since he did not actually part w/ the ownership of his P200 & in fact asked his
wife to deposit said amount in the account of Sterela so that a certification can be issued to the effect that Sterela had sufficient funds for purposes of its
incorporation. He retained some degree of control over his money through his wife who was made a signatory to the savings account & in whose possession the
savings account passbook was given.
ISSUE:/HELD:
1) Whether the transaction is a simple loan (mutuum) or mere accomodation? ACCOMODATION/ COMMODATUM
2) Whether Producers Bank is solidarily liable for the return of Franklin Vives' money? YES
RATIO:
1) CA is correct in ruling that the transaction between Franklin Vives & Doronilla was a commodatum & not a mutuum. Art. 1933 seems to imply that if the subject of
the contract is a consumable thing, such as money, the contract would be a mutuum. However, there are some instances where a commodatum may have for its object
a consumable thing. Art. 1936 of CC provides that "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 the intention of the parties is to lend
consumable goods & to have the very same goods returned at the end of the period agreed upon, the loan is a commodatum & not mutuum. 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 &
subsequent acts of the parties shall be considered in such determination.

TC & CA correctly noted that F. Vives 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 w/ the promise that the amount shall be returned within 30 days. Vives merely accomodated Doronilla by lending his money
without consideration as a favor to his good friend Sanchez

Doronilla's attempts to return to Vives P200,000 w/ additional P12,000 allegedly representing interest on the mutuum, did not convert the transaction from
commodatum to mutuum because such was not the intent of the parties & because the additional P12, 000 corresponds to the fruit of the lending of P200,000 Art.
1935 of CC provides that "the bailee in commodatum acquires the use of the thing loaned but not its fruits." Thus, it was only proper for Doronilla to remit to F. Vives
the interest accruing to F. Vives' money deposited w/ Producers Bank.

2)(Note: The discussion on the connivance between Atienza & Doronilla is an issue relevant in TORTS & DAMAGES) Whether the transaction is mutuum or commodatum
has no bearing on whether Producers Bank is liable for the return of F. Vives' money because the factual circumstances of the case clearly show that Producers Bank,
through its employee, Asst. Manager Atienza, was partly responsible for the loss of private respondent's money & is liable for its restitution. Doronilla was permitted
by Producers Bank through Atienza to withdraw from the savings account several times even without presenting the passbook in violation of the rules written on the
passbook w/ regard to savings deposits. Atienza knew that the money belonged not to Doronilla but to F. Vives. The signature of Doronilla in the withdrawal was not
authorized because he was not a signatory to the signature card provided by the bank whenever a deposit is opened. TC & CA found that Atienza allowed said
withdrawals because he was party to Doronilla's scheme of defrauding F. Vives. Note: Liability of Producers Bank was decided based on Article 2180 of CC in re primary
& solidary liability of employers for damages caused by their employees acting within the scope of their assigned tasks (US case law: even though the employee may
have failed in its duties to the employer). Producers Bank is solidarily liable w/ Doronilla & Dumagpi for the return of P200,000 since it failed to prove that it exercised
due diligience to prevent the unauthorized withdrawals from Sterela's savings account, & that it was not negligent in the selection & supervision of Atienza