UP

Law F2021 06 Producers Bank of the Philippines v. CA

Credit Transactions Commodatum – Object 2003 J. Callejo Sr.
Art. 1936-1937

SUMMARY

Respondent Vives opened a savings account and deposited P200k for the incorporation of the business of Arturo
Doronilla. Later, the petitioner Producers Bank of the Philippines allowed Doronilla to withdraw money from the
savings account and to debit the same to cover overdrawings in a separate current account. Petitioner bank claims
that it was not liable to respondent Vives as the latter entered into a contract of mutuum or loan with Doronilla so
the bank was not a party to such transaction. The SC ruled that the transaction was a commodatum under Art. 1936
of the NCC as the consumable object was merely used for exhibition.


FACTS

§ Private respondent Franklin Vives was asked by his neighbor and friend, Angeles Sanchez, to help her friend,
Col. Arturo Doronilla. Respondent Vives would deposit P200,000 in the petitioner Producers Bank of the
Philippines in a savings account for the incorporation of Doronilla’s business, Sterela Marketing and Services.
According to their agreement, the money would not be withdrawn and would be returned to Vives within a
month.
§ Franklin Vives’ wife, Incocencia, and his private secretary, Estrella Dumagpi, accompanied Angeles Sanchez
to the bank to create the savings account in the name of Sterela. Respondent Vives then issued a check for
P200k in favor of Sterela.
§ Later, Vives learned that Sterela wasno longer holding office to the address given to him. Upon checking
with the bank, the assistant manager, Rufo Atienza, told them that the money was partially withdrawn by
Doronilla and the remaining P90k could not be withdrawn to answer for the postdated checks issued by
Doronilla. After the Sterela savings account was opened, Doronilla had opened a current account and
authorized the bank to debit the said Savings account to cover overdrawings in the Current account.
Moreover, Doronilla had obtained a loan of P175k from the bank and issued postdated checks to pay it but
all were dishonored.
§ Vives reached out to Doronilla through Sanchez. Doronilla issued a postdated check worth P212k but it was
dishonored on both times Vives tried to present it in the bank.
§ Court case:
o Vives filed an action for recovery of sum of money in RTC Pasig against Doronilla, Sanchez, Dumagpi,
and petitioner Producers Bank of the Philippines. The RTC ruled in favor of Vives and ordered
Doronilla, Dumagpi, and the bank to pay P200k for the money deposited as well as moral and
exemplary damages and attorney’s fees.
o The CA affirmed the RTC decision
§ On appeal to the SC:
o Petitioner bank claims that it had no liability against Vives. First, the transaction between respondent
Vives and Doronilla is a simple loan (mutuum) as it involved a consumable thing (money) and the
transaction was onerous. As such, the bank cannot be held liable for the return of Vives’ P200k as it
was not a party to the transaction between Vives and Doronilla. Second, the authority to withdraw
from the savings account remained exclusively with Doronilla as he was the sole proprietor of Sterela
and had the legal title to the savings account.
o Respondent Vives claims that the transaction was an accommodation since he did not actually part
with his P200k. His wife was a signatory to the savings account and he retained control over his
money. Moreover, the petitioner bank’s Asst. Manager Atienza was liable for the return of his money
as he connived with Doronilla in defrauding Vives.




 RATIO

W/N the use of money for the incorporation of a business is a commodatum transaction

YES. The transaction between respondent Vives and Doronilla was a commodatum transaction.
Under Art. 1933 of the NCC, in a commodatum, the transaction is gratuitous and the bailor retains ownership of
the thing loaned. On the other hand, the contract is mutuum or loan when money or any consumable thing is
delivered to another and ownership is passed on the condition that the same amount, kind, and quality shall be
paid. Art. 1936 of the NCC further provides that a commodatum may also have a consumable thing as its object
if the purpose of the contract is not the consumption of the object, as wehen it is merely for exhibition. Herein,
the intention of the parties is given primary importance in determining the actual character of a contract. As it
was clear that the money was for the business’ incorporation and was not to be withdrawn from the savings
account, then the contract was a commodatum.

The attempt of Doronilla to return to respondent Vives the amount (through the dishonored checks) did not
convert the transaction into a mutuum as this was not the intent of the parties. The additional P12k constituted
fruits for the lending of P200k. Under Art. 1935 if the NCC, the bailee in commodatum acquires the use of the
thing loaned but not its fruits.

W/N the petitioner bank should be solidarily liable for the return of the respondent Vives’ money

YES. The petitioner bank would still be liable whether the transaction was a mutuum or commodatum as the
bank was partly responsible for the loss of the respondent Vives’ money through its employee, Mr. Atienza.
Under Art. 2180 of the NCC, employers shall be held primarily and solidarily liable for damages caused by their
employees acting within the scope of their assigned tasks. Herein, Asst. Manager Atienza allowed Doronilla to
withdraw from the savings account even without presenting the passbook. Petitioner also failed to prove that it
exercised due diligence to prevent the unauthorized withdrawals.

FALLO
WHEREFORE, the petition is hereby DENIED.
The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.