Credit - 6

Producers Bank of the Philippines vs CA (2003)

Doctrine:
Facts:
Vives (will be the creditor in this case) was asked by his friend Sanchez to help the
latters friend, Doronilla (will be the debtor in this case) in incorporating Doronillas
business Strela. This help basically involved Vives depositing a certain amount of
money in Strelas bank account for purposes of incorporation (rationale: Doronilla had to
show that he had sufficient funds for incorporation). This amount shall later be returned
to Vives.
Relying on the assurances and representations of Sanchez and Doronilla, Vives issued a
check of P200,00 in favor of Strela and deposited the same into Strelas newly-opened
bank account (the passbook was given to the wife of Vives and the passbook had an
instruction that no withdrawals/deposits will be allowed unless the passbook is
presented).
Later on, Vives learned that Strela was no longer holding office in the address previously
given to him. He later found out that the funds had already been withdrawn leaving only
a balance of P90,000. The Vives spouses tried to withdraw the amount, but it was
unable to since the balance had to answer for certain postdated checks issued by
Doronilla.
Doronilla made various tenders of check in favor of Vives in order to pay his debt. All of
which were dishonored.
Hence, Vives filed an action for recovery of sum against Doronilla, Sanchez, Dumagpi
and Producers Bank.
TC & CA: ruled in favor of Vives.
Issue/s:
(1) WON the transaction is a commodatum or a mutuum. COMMODATUM.
(2) WON the fact that there is an additional P 12,000 (allegedly representing interest) in
the amount to be returned to Vives converts the transaction from commodatum to
mutuum. NO.
(3) WON Producers Bank is solidarily liable to Vives, considering that it was not privy to
the transaction between Vives and Doronilla. YES.
Held/Ratio:
(1) The transaction is a commodatum.
CC 1933 (the provision distinguishing between the two kinds of loans) seem to imply
that if the subject of the contract is a consummable thing, such as money, the contract
would be a mutuum. However, there are instances when a commodatum may have for
its object a consummable thing. Such can be found in CC 1936 which states that
consummable 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. In this case,
the intention of the parties was merely for exhibition. Vives agreed to deposit his money
in Strelas account specifically for purpose of making it appear that Streal had sufficient
capitalization for incorporation, with the promise that the amount should be returned
withing 30 days.

(2) CC 1935 states that the bailee in commodatum acquires the use of the thing loaned but
not its fruits. In this case, the additional P 12,000 corresponds to the fruits of the
lending of the P 200,000.
(3) Atienza, the Branch Manager of Producers Bank, allowed the withdrawals on the
account of Strela despite the rule written in the passbook that neither a deposit, nor a
withdrawal will be permitted except upon the production of the passbook (recall in this
case that the passbook was in the possession of the wife of Vives all along). Hence, this
only proves to show that Atienza allowed the withdrawals because he was party to
Doronillas scheme of defrauding Vives. By virtue of CC 2180, PNB, as employer, is held
primarily and solidarily liable for damages caused by their employees acting within the
scope of their assigned tasks. Atienzas acts, in helpong Doronilla, a customer of the
bank, were obviously done in furtherance of the business of the bank, even though in
the process, Atienza violated some rules.
Digested by: Cari Mangalindan (A2015)

Producers Bank of the Philippines v. CA, 397 SCRA 651

Doronilla is in the process of incorporating his business and to comply with one of the
requirements of incorporation, he caused Vives to issue a check which was then
deposited in Doronillas savings account. It was agreed that Vives can withdraw his
money in a months time. However, what Doronilla did was to open a current account
and instructed the bank to debit from the savings account and deposit it in his current
account. So when Vives checked the savings account, the money was gone. Is the
contract a mutuum or commodatum?
Supreme Court held that the contract is a commodatum. Although in a commodatum,
the object is a non-consumable thing, there are instances where a consumable thing
may be the object of a commodatum, such as when the purpose is not for consumption
of the object but merely for exhibition (Art. 1936). Thus, if consumable goods are loaned
only for 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 and not a mutuum.