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 latter’s friend, Doronilla
(will be the debtor in this case) in incorporating Doronilla’s business “Strela”. This “help” basically involved
Vives depositing a certain amount of money in Strela’s 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 Strela’s 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later found out that the funds had already been withdrawn leaving only a balance of P90,000.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 Producer’s 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 Producer’s 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 Strela’s 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 Producer’s 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
Doronilla’s 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.
Atienza’s 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)