Producers Bank of the Philippines vs CA, Franklin Vives (2003)

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 He later found out that the funds had already been withdrawn leaving only a balance of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.

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.