University of the Philippines College of Law

CJSE D2021
Case Name PRODUCERS BANK OF THE PHIL. v. CA
Topic Object of Commodatum
Case No. | Date GR No. 115324 | Feb 19, 2003
Ponente Callejo Sr, J.

RELEVANT FACTS
 Vives was asked for help by Sanchez in incorporating Col. Doronilla’s business. Sanchez asked Vives to
deposit money in Sterela’s (the company’s) bank account for purposes of incorporation, but assured Vives
that he could withdraw the money within a month’s time. Vives issued a check, relying on the assurances
and representations of Sanchez and Doronilla, and Vives’ wife deposited the check. Vives filed a complaint
for recovery of sum of money.

ISSUE AND RATIO DECIDENDI

Issue Ratio
W the transaction The transaction between Vives and Doronilla is commodatum.
between Vives and PRODUCERS argument: The transaction is a simple loan (mutuum) because all the
Doronilla is a simple elements are present:
loan (mutuum) or o First, what was delivered was money, a consumable thing
commodatum o Second, the transaction was onerous as Doronilla was obliged to pay interest, as
evidenced by the check issued by Doronilla in the amount of P212,000 (P12K
more than what was deposited)
o Moreover, Vives sued Sanchez for failure to recover this moneyàshows that the
transaction was not merely gratuitous, but “had a business angle”

VIVES’ argument: The transaction is not a mutuum but an accommodation, since he didn’t
part with the ownership of his money; he asked his wife to open the account, and he
retained some degree of control because of his wife who was made a signatory and in
whose possession the passbook was given

SC: No error by the CA when it ruled that the transaction was a commodatum and not a
mutuum
 Art. 1933, NCC distinguishes the two kinds of loans:
o Art. 1933: 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.
o Simple loan may be gratuitous or with a stipulation to pay interest.
o In commodatum the bailor retains the ownership of the thing loaned,
while in simple loan, ownership passes to the borrower. (1740a)
 Provision seems to imply that if the subject is a consumable thing, such as
money, the contract would be a mutuum
 University of the Philippines College of Law
CJSE D2021
- BUT there are instances where a commodatum may have for its object a consumable
thing
 Art. 1936: 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. (n)
 SC: If consumable goods are loaned only for the purposes of exhibition, or when
the intention of the parties is to lend consumable goods and to have the very same
goods returned at the end of the period agreed upon, the loan is a commodatum,
not a mutuum
 - Rule is that the intention of the parties 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
 - Vives agreed to deposit his money 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 thirty (30) days.”
o o He merely “accommodated” Doronilla by lending his money without
consideration, as favor to Sanchez
o o But it WAS CLEAR that the money would not be removed from Sterela’s
savings account and would be returned to Vives after thirty (30) days
 Doronilla’s attempt to return the P200,000 with an additional P12,000, 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
o o P12,000 also corresponds to the fruits of the lending of the P200,000
o o Art. 1935: The bailee in commodatum acquires the used of the thing
loaned but not its fruits; if any compensation is to be paid by him who
acquires the use, the contract ceases to be a commodatum. (1941a)
o o It was proper for Doronilla to remit to Vives the interest
WON Mr. Atienza YES.
could be faulted for PRODUCERS: Mr. Atienza cannot be faulted for allowing Doronilla to withdraw because he
allowing Doronilla to was the sole proprietor of the company, and who alone had legal title to the savings
withdraw from the account
savings account VIVES: Mr. Atienza connived with Doronilla in defrauding him since it was Atienza who
facilitated the opening of the account as well as the approval of the authority to debit the
account
 - Producers’ rules for savings deposits written on the passbook states that
“neither a deposit nor a withdrawal will be permitted except upon the production
of the depositor savings bank book” BUT Doronilla was permitted to withdraw
even without presenting the passbook, not just once, but several times
Both CA and TC found that Atienza allowed the withdrawals because he was party to
Doronilla’s “scheme” to defraud Vives
 o It was made in the branch where Atienza was a key officer because “it will be
easier for them to get a certification”
 o Atienza knew that the money didn’t belong to Doronilla or Sterela because of
the “coordination” he had with Doronilla AND because he was explicitly told by
Mrs. Vives that the money belonged to her and her husband and the deposit was
just to accommodate Doronilla
 University of the Philippines College of Law
CJSE D2021
 o Although the only ones empowered to withdraw from the savings account were
Mrs. Vives and Sanchez (authorized signatories), it was admitted by Atienza that
the procedure wasn’t followed because Sterela was owned by Doronilla, and
Doronilla had the full authority to withdraw
 o It was an accepted practice to present the passbook whenever a withdrawal is
made in a savings deposit, but the procedure was dispensed with; instead, a
certification for a duplicate passbook was issued because the original was
allegedly surrendered to a branch, but the original was never surrendered
because it remained in the possession of Mrs. Vives
- SC: Atienza’s active participation in the perpetration of the fraud and deception caused
the laws; he committed wrongful acts
WON Producers YES. Producers should be held solidarily liable with Doronilla and Dumagpi as
should be held liable Atienza’s employer.
to Vives - PRODUCERS: It cannot be held liable for the return of the P200,000 because it is not privy
to the transaction between Vives and Dornilla; since there was no wrongful act or
omission on its part, it cannot be held liable for actual, moral, or exemplary damages and
attorney’s fees
- VIVES: Producers should be liable for the return of the money because of Mr. Atienza’s
behavior
- Under Art. 2180, ERs shall be primarily and solidarily liable for damages caused be their
EEs acting within the scope of their assigned tasks
- SC: Atienza was an EE of Producers and was acting within the scope of his authority as
Asst. Branch Manager when he assisted Doronilla, which were done in furtherance of
Producers’ interests, while violating some of its rules
- SC: Under Art. 2180, Producers should be held liable for the return since it failed to prove
that it exercised due diligence to prevent the unauthorized withdrawals and that it was
not negligent in the selection and supervision of Atienza

RULING
Petition denied.