Spouses Sy, et al. vs.

Westmont Bank
G.R. No. 201074

Facts:

Respondent Westmont bank claimed that petitioner Spouses Sy, et al., under the trade
name Moondrops General Merchandising (Moondrops), obtained a loan from them
amounting to a total of P6,429,500 and failed to pay for it.

Petitioners, on the other hand, claimed that the loan application was denied and they
got a loan from a private person named Amado Chua as evidenced by cashier checks
from the latter.

During trial against the petitioners, Westmont presented, claimed that the proceeds of
the loan were credited to the account of Moondrops per its loan manifold. Westmont,
however, never offered such a loan manifold in evidence. The bank presented
promissory notes and disclosure statements attached to their complaint.

Petitioners insisted that the promissory notes and disclosure statement attached to the
complaint were false and different from the documents they had signed.

The issue is whether or not a contract of loan was perfected between the bank and the
petitioners to make them liable for its non-payment.

Held: No.

Simple Loan or mutuum is a real contract perfected thru delivery

A simple loan or mutuum is a contract where one of the parties delivers to another,
either money or other consumable thing, upon the condition that the same amount of
the same kind and quality shall be paid. A simple loan is a real contract and it shall
not be perfected until the delivery of the object of the contract. Necessarily, the
delivery of the proceeds of the loan by the lender to the borrower is indispensable to
perfect the contract of loan. Once the proceeds have been delivered, the unilateral
characteristic of the contract arises and the borrower is bound to pay the lender an
amount equal to that received.

Loan proceeds were not delivered to the petitioners

Petitioners presented a cashier's check, in the amount of P2,429,500.00, obtained from

Chua, which showed that the latter personally provided the loan, and not the bank. As
the proceeds of the loan were not delivered by the bank, there was no perfected
contract of loan. In addition, they doubt the reliability of the promissory notes as their
original copies were not presented before the RTC.