GARCIA VS.

THIO

FACTS:

            Thio received from Garcia two crossed checks payable to the order of Marilou
Santiago. Thio failed to pay the principal amounts of the loans when they fell due .
Garcia filed a complaint for sum of money and damages with the RTC. Thio denied that
she contracted the two loans and countered that it was Marilou Satiago to whom Garcia
lent the money. She claimed she was merely asked Garcia to give the checks to
Santiago. She issued the checks not as payment of interest but to accommodate
petitioner’s request that respondent use her own checks instead of Santiago’s.
RTC and CA DECISION:
            RTC ruled in favor of petitioner. CA reversed RTC and ruled that there was no
contract of loan between the parties.

ISSUE:
Whether or not there was a contract of loan between Thio and Garcia

HELD:

Yes. There was a contract of loan between Thio and Garcia. A loan is a real
contract, not consensual, and as such it is perfected only upon the delivery of the
object of the contract. Upon delivery of the contract of loan (in this case the money
received by the debtor when the checks were encashed) the debtor acquires ownership
of such money or loan proceeds and is bound to pay the creditor an equal amount. It is
undisputed that the checks were delivered to respondent.

Petition granted; judgment and resolution reversed and set aside.