Yam vs.

Malik
Facts:
Rosalinda Amin charged petitioners Yam Chee Kiong and Yam Yap Kieng with estafafor misappropriation of the amount of
P50k but the complaint stated on its face that thepetitioners received the amount as a loan and an independent action for
collection of sum ofmoney was also filed. Tan Chu Kao also charged petitioners with estafa for the misappropriationof the amount of
P30k. Likewise, the complaint stated on its face that petitioners received theamount as a loan and an independent action for collection
of sum of money was also filed.Augusto Sajor also filed for estafa against the petitioners for misappropriation of the amount ofP20k
but he didnt file an independent action for collection of sum of money but in a swornstatement he stated that the amount was
received by the petitioners as a loan. Thus,respondent judge Hon. Nabdar Malik issued warrant of arrests for Yam Chee
Kiong and YamYap Kieng.
Issue:
Can there be a crime of estafa for non-payment of a loan?
Held:
No. In order that a person be convicted of Swindling (Estafa) under Art. 315 of the Revised Penal Code, it must be proven that he has
the obligation to deliver or return the same money, goods or personal property that he received. Petitioners had no such obligation to
return the same money, i.e., the bills or coins, which they received from private respondents. This is so because as clearly stated in
criminal complaints, the related civil complaints and the supporting sworn statements, the sums of money that petitioners received
were loans. In U.S. vs. Ibaez, 19 Phil. 559, 560 (1911), the Supreme Court held that it is not estafa for a person to refuse to pay his
debt or to deny its existence.
It is the opinion of the Court that when the relation is purely that of debtor and creditor, the debtor cannot be held liable for the crime
of estafa, under said article, by merely refusing to pay or by denying the indebtedness.
It appeared that respondent judge failed to appreciate the distinction between the two types of loan, mutuum and commodatum, when
he performed the questioned acts. He mistook the transaction between petitioners and private respondents to be commodatum wherein
the borrower does not acquire ownership over the thing borrowed and has the duty to return the same thing to the lender.

Saura Import &Export Co., Inc v. DBP

G.R. No. L-24968 April 27, 1972
Facts: Saura Inc. applied to the Rehabilitation Finance Corp (before its conversion to DBP) for a loan of 500k secured by a first
mortgage of the factory building to finance for the construction of a jute mill factory and purchase of factory implements. RFC
accepted and approved the loan application subject to some conditions which Saura admitted it could not comply with. Without having
received the amount being loaned, and sensing that it could not at anyway obtain the full amount of loan, Saura Inc. then asked for
cancellation of the mortgage which RFC also approved. Nine years after the cancellation of the mortgage, Saura sued RFC for
damages for its non-fulfillment of obligations arguing that there was indeed a perfected consensual contract between them.
Issue: Was there a perfected consensual contract? Was there a real contract of loan which would warrant recovery of damages arising
out of breach of such contract?
Held: On the first issue, yes, there was indeed a perfected consensual contract, as recognized in Article 1934 of the Civil Code. There
was undoubtedly offer and acceptance in this case: the application of Saura, Inc. for a loan of P500,000.00 was approved by resolution
of the defendant, and the corresponding mortgage was executed and registered. But this fact alone falls short of resolving the second
issue and the basic claim that the defendant failed to fulfill its obligation and the plaintiff is therefore entitled to recover damages. The
action thus taken by both partiesSaura's request for cancellation and RFC's subsequent approval of such cancellationwas in the
nature of mutual desistance what Manresa terms "mutuo disenso" which is a mode of extinguishing obligations. It is a concept
derived from the principle that since mutual agreement can create a contract, mutual disagreement by the parties can cause its
extinguishment. In view of such extinguishment, said perfected consensual contract to deliver did not constitute a real contract of loan.

ESTORES V. SPOUSES SUPANGAN, (2012)

Facts:
1.
In Oct. 1993, Hermojina Estores and Spouses Supangan entered into a Conditional Deed of Sale where Estores offered to
sell, and Spouses offered to buy a parcel of land in Cavite for P4.7M.
2.
After almost 7 years and despite the payment of P3.5M by the Spouses, Estores still failed to comply with her obligation to
handle the peaceful transfer of ownership as stated in 5 provisions in the contract.
3.
In a letter in 2000, Spouses demanded the return of the amount within 15 days from receipt
4.
In reply, Estores promised to return the same within 120 days
5.
Spouses agreed but imposed an interest of 12% annually
6.
Estores still failed despite demands
7.
Spouses filed a complaint with the RTC against Estores and Roberto Arias (allegedly acted as Estores agent)
8.
In Answer, Estores said they were willing to pay the principal amount but without the interest as it was not agreed upon
a.
That since the Conditional Deed of Sale provided only for the return of the downpayment in case of breach, they cant be
liable for legal interest as well
9.
RTC ruled saying that the Spouses are entitled to the interest but only at 6% per annum and also entitled to attys fees
10.
On appeal, CA said that the issue to resolve is
a.
whether it is proper to impose interest for an obligation that does not involve a loan or forbearance of money in the absence
of stipulation of the parties
11.
CA affirmed RTC
a.
That interest should start on date of formal demand by Spouses to return the money not when contract was executed as stated
by the RTC
b.
That Arias not be solidarily liable as he acted as agent only and did not expressly bind himself or exceeded his authority
12.
Estores contends:
a.
Not bound to pay interest because the deed only provided for the return of the downpayment in case of failure to comply with
her obligations
b.
That atty fees not proper because both RTC and CA sustained her contention that 12% interest was uncalled for so it showed
that Spouses did not win
13.
Spouses contend:
a.
It is only fair that interest be imposed because Estores failed to return the amount upon demand and used the money for her
benefit
b.
Estores failed to relocate the house outside the perimeter of the subject lot and complete the necessary documents
c.
As to the fees, they claim that they were forced to litigate when Estores unjustly held the amount
Issue:
Is the imposition of interest and attorneys fees is proper? YES
Interest based on Art 2209 of CC (6%) or under Central Bank Circular 416 (12%)? 12%
Held:
Interest may be imposed even in the absence of stipulation in the contract.

Article 2210 of the Civil Code expressly provides that [i]nterest may, in the discretion of the court, be allowed upon
damages awarded for breach of contract.

Estores failed on her obligations despite demand.

o
She admitted that the conditions were not fulfilled and was willing to return the full amount of P3.5M but hasnt done so
o
She is now in default
The interest at the rate of 12% is applicable in the instant case.

Gen Rule: the applicable interest rate shall be computed in accordance with the stipulation of the parties

Exc: if no stipulation, applicable rate of interest shall be 12% per annum

o
When obligation arises out of a loan or forbearance of money, goods or credits

In other cases, it shall be 6%

In this case, no stipulation was made

Contract involved in this case is not a loan but a Conditional Deed of Sale.
o
No question that the obligations were not met and the return of money not made


Even if transaction was a Conditional Deed of Sale, the stipulation governing the return of the money can be considered as a
forbearance of money which requires 12% interest

In Crismina Garments, Inc. v. Court of Appeals, Forbearance-- contractual obligation of lender or creditor to refrain during a
given period of time, from requiring the borrower or debtor to repay a loan or debt then due and payable.
o
In such case, forbearance of money, goods or credits will have no distinct definition from a loan.
o
however, the phrase forbearance of money, goods or credits is meant to have a separate meaning from a loan, otherwise
there would have been no need to add that phrase as a loan is already sufficiently defined in the Civil Code
o
Forbearance of money, goods or credits should therefore refer to arrangements other than loan agreements, where a person
acquiesces to the temporary use of his money, goods or credits pending happening of certain events or fulfillment of certain
conditions.

Estores unwarranted withholding of the money amounts to forbearance of money which can be considered as an involuntary
loan so rate is 12% starting in Sept. 2000
The award of attorneys fees is warranted.

no doubt that the Spouses were forced to litigate to protect their interest, i.e., to recover their money. The amount of
P50,000.00 more appropriate

GSIS vs. CA G.R. No. L-52478

30 October 1986
FACTS Sps. Medina applied for a loan with GSIS in the amount of P600,000. But only P350,000 had been approved (BR 5041)
subject to the conditions:
a. that 9% per annum shall be the interest rate, compounded monthly;
b. b. that the loan shall be repayable in 10 years at a monthly mortization of P4,433.65 including principal and interest, and that
any installment or amortization due and unpaid shall bear an interest of 9%/12 per month.
The Office of the Economic Coordinator, in a 2nd Indorsement, further reduced the approved amount to P295,000. The Medinas
accepted the reduced amount, executed a promissory note and a REM in favor of GSIS. On June 6, 1962, the approved loan was
restored to P350,000 and was denominated as Account No. 31055. As a consequence, the Medinas subsequently executed an
Amendment of Real Estate Mortgage. Upon application by the Medinas, GSIS adopted Resolution No. 121, as amended by Resolution
No. 348, granting an additional loan of P230,000 on the security of the same mortgaged properties and additional properties. The loan
was denominated as Account No. 31442. Beginning 1965, the Medinas defaulted in their payments and in 1967, they began defaulting
in the payment of their fire insurance premiums. On May 3, 1974, GSIS informed the debtors that they had arrearages in the amount of
P575,652.42 as of April 18, 1974 and demanded payment within 7 days, otherwise, it would foreclose the mortgage. On Apr. 21, 1975,
GSIS applied for foreclosure of the mortgage. The Medinas filed a complaint, praying for the issuance of a restraining order or writ of
PI, but no such RO or WPI was issued in view of PD No. 385. On Apr. 25, 1975, the Medinas made a last partial payment in the
amount of P209, 662.80. The properties of the medinas were sold at public auction with GSIS as the highest bidder.
Hence, the Medinas filed an amended complaint, praying for the declaration of nullity of their 2 REM contracts with the GSIS, as well
as of the EJ foreclosure proceedings, and for the refund of excess payments, damages and AF.
TC: N&V + Medinas to pay GSIS P1,611.12 in fully payment of their obligation with 9% p.a. interest from Dec. 11, 1975
CA: Affirmed: GSIS to reimburse P9,580 OP and pay Sp Medina P3,000 AF and P1,000 litigation exp;
SC: PRC ; MR: due course
ISSUE # 1 WON the CA erred in holding that the amendment of the REM dated July 6, 1962 superseded the mortgage contract dated
Apr. 4, 1962, particularly wrt the compounding of interest HELD Said Amendment was never intended to completely supersede the
mortgage contract dated April 4, 1962. In fact, GSIS, as a matter of policy, imposes uniform terms and conditions for all its real estate
loans, particularly with respect to compounding of interest.
GSIS: Did not supersede; amended only wrt the amount secured thereby and the amount of monthly amortizations; others deemed
rewritten
Medinas: no express stipulation on the compounded interest OP o The difference in the computation lies in the inclusion of the
compounded interest as demanded by the GSIS on the one hand and the exclusion thereof, as insisted by the Medinas on the other.
ISSUE # 2 WON the CA erred in sustaining the Sp. Medinas claim of OP, by crediting the fire insurance proceeds in the sum of
P11,152.02 to the total payment made by said spouses as of Dec. 11, 1975
HELD YES. The plaintiffs were not entitled to a credit of P19,381.07 as FI proceeds, as they were only entitled to and were credited
with P11,152.02.
ISSUE # 3 WON the CA erred in holding that the interest rates on the loan accounts of the Medinas are usurious

HELD NO. Usury Law applies only to interest by way of compensation for the use or forbearance of money. Interest by way of
damages is governed by Article 2209 of the Civil Code
ISSUE # 4: WON the CA erred in affirming the annulment of the subject EJ foreclosure and sheriffs Certificate of Sale
HELD Since the Medinas failed to settle their accounts with the GSIS, the latter had a perfect right to foreclose the mortgage.
Reversed and set asideVALID

G.R. No. 84719 August 10, 1989

YONG CHAN KIM, Petitioner, vs. PEOPLE OF THE PHILIPPINES, HON. EDGAR D. GUSTILO Presiding Judge, RTC,
6th Judicial Region, Branch 28 Iloilo City and COURT OF APPEALS (13th Division), SOUTHEAST ASIAN FISHERIES
DEVELOPMENT CENTER AQUACULTURE DEPARTMENT (SEAFDEC), Respondents.
FACTS:
Petitioner Yong Chan Kim was employed as a Researcher at the Aquaculture Department of the Southeast Asian Fisheries
Development Center (SEAFDEC) with head station at Tigbauan, Province of Iloilo. As Head of the Economics Unit of the Research
Division, he conducted prawn surveys which required him to travel to various selected provinces in the country where there are
potentials for prawn culture.
On 15 June 1982, petitioner was issued Travel Order No. 2222 which covered his travels to different places in Luzon from 16 June to
21 July 1982, a period of thirty five (35) days. Under this travel order, he received P6,438.00 as cash advance to defray his travel
expenses.
Within the same period, petitioner was issued another travel order, T.O. 2268, requiring him to travel from the Head Station at
Tigbauan, Iloilo to Roxas City from 30 June to 4 July 1982, a period of five (5) days. For this travel order, petitioner received a cash
advance of P495.00.
On 14 January 1983, petitioner presented both travel orders for liquidation, submitting Travel Expense Reports to the Accounting
Section. When the Travel Expense Reports were audited, it was discovered that there was an overlap of four (4) days (30 June to 3
July 1982) in the two (2) travel orders for which petitioner collected per diems twice. In sum, the total amount in the form of per
diems and allowances charged and collected by petitioner under Travel Order No. 2222, when he did not actually and physically travel
as represented by his liquidation papers, was P1,230.00.
Petitioner was required to comment on the internal auditor's report regarding the alleged anomalous claim for per diems. In his reply,
petitioner denied the alleged anomaly, claiming that he made make-up trips to compensate for the trips he failed to undertake under
T.O. 2222 because he was recalled to the head office and given another assignment.
In September 1983, two (2) complaints for Estafa were filed against the petitioner before the Municipal Circuit Trial Court at
Guimbal, Iloilo.
ISSUE:
Whether or not petitioner can be held criminally liable on the ground of failure to liquidate her traveling expenses. NO.
RULING:
It is undisputed that petitioner received a cash advance from private respondent SEAFDEC to defray his travel expenses under T.O.
2222. It is likewise admitted that within the period covered by T.O. 2222, petitioner was recalled to the head station in Iloilo and given
another assignment which was covered by T.O. 2268. The dispute arose when petitioner allegedly failed to return P1,230.00 out of the

cash advance which he received under T.O. 2222. For the alleged failure of petitioner to return the amount of P1,230.00, he was
charged with the crime of Estafa under Article 315, par. 1(b) of the Revised Penal Code.
In order that a person can be convicted under the above-quoted provision, it must be proven that he had the obligation to deliver or
return the same money, good or personal property that he had received. Was petitioner under obligation to return the same money
(cash advance) which he had received? We believe not.
Liquidation simply means the settling of indebtedness. An employee, such as herein petitioner, who liquidates a cash advance is in fact
paying back his debt in the form of a loan of money advanced to him by his employer, as per diems and allowances.
Similarly, as stated in the assailed decision of the lower court, "if the amount of the cash advance he received is less than the amount
he spent for actual travel . . . he has the right to demand reimbursement from his employer the amount he spent coming from his
personal funds.
In other words, the money advanced by either party is actually a loan to the other. Hence, petitioner was under no legal obligation to
return the same cash or money, i.e., the bills or coins, which he received from the private respondent.
Article 1933 and Article 1953 of the Civil Code define the nature of a simple loan.
Art. 1933. By the contract of loan, one of the parties delivers to another, either something not consumable so that the
latter may use the same for a certain time and return it, in which case the contract is called a commodatum; or money
or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid, in
which case the contract is simply called a loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum the bailor retains the ownership of the thing loaned, while in simple loan, ownership passes to the
borrower.
Art. 1953. A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and
is bound to pay to the creditor an equal amount of the same kind and quality.
The ruling of the trial judge that ownership of the cash advanced to the petitioner by private respondent was not
transferred to the latter is erroneous. Ownership of the money was transferred to the petitioner.
Since ownership of the money (cash advance) was transferred to petitioner, no fiduciary relationship was created. Absent this fiduciary
relationship between petitioner and private respondent, which is an essential element of the crime of estafa by misappropriation or
conversion, petitioner could not have committed estafa.
Additionally, it has been the policy of private respondent that all cash advances not liquidated are to be deducted correspondingly from
the salary of the employee concerned. The evidence shows that the corresponding salary deduction was made in the case of
petitioner vis-a-vis the cash advance in question.

LIGUTAN VS. CA G.R. No. 138677 | 12 February 2002

FACTS

1.

Tolomeo Ligutan and Leonidas dela Llana obtained a loan from private respondent Security Bank and Trust Company (PN,
jointly and severally, P120k, 15.189% p.a., penalty of 5% every month on outstanding principal and interest in case of
default, 10% atty fees). Maturity date: 8 Sep 1981, extension till 29 Dec 1981.
2. Several demands from bank; as of 20 May 1982: P114,416.10
3. Final demand letter (full payment required): 30 Sep 1982; default
4. Bank filed a complaint for recovery: RTC Makati Br 143
a. Bank presented evidence, rested case
b. Petitioners reset on 2 occasions
1) Bank moved to declare petitioners in default granted
2) 2 years later, petitioners MRd denied
c. TC ruled in favor of plaintiff (P114,416, 15.189% p.a., 2% service charge, 5% p.m. penalty charge, commencing
20 May 1982 until fully paid, 10% atty fees)
5. Petitioners appealed to CA
a. Assailed rejection of motion to present evidence, 2% service charge, 5% p.m. penalty charge, 10% atty fees
b. CA affirmed except for 2% service charge (deleted pursuant to CB Circular 783)
c. Petitioners MRd for reduction of 5% p.m. penalty charge for being unconscionable
d. Bank MRd that payment of interest and penalty commences from time of default (not filing of complaint)
e. CA: when obligation fell due, 5% p.m. penalty charge
f. Petitioners filed omnibus MR and to admit newly- discovered evidence alleging executing a real estate mortgage as security
effect of novation
g. Mortgage foreclosed without notice; they did not credit them with proceeds h. CA denied MR (R52 S2: no second MR
allowed) and admission of newly-discovered evidence (evidence known to them, not newly-discovered)
ISSUE # 1 Was penalty clause unconscionable?
RATIO Impliedly NO, but reduced due to partial performance. SC agreed with CA that it may be reduced due to partial performance
and to allow petitioners to finally settle the obligation. (Art 1229 CC) Penalty Clause: Accessory undertaking to assume greater
liability on the part of an obligor in case of breach of an obligation Function of Penalty Clause o To strengthen the coercive force of
the obligation; o To provide, in effect, for what could be the liquidated damages resulting from such a breach
ISSUE # 2 Was the 15% p.a. interest unreasonable?
RATIO NO. The interest on its face is not excessive. Interest: Cost of money; fundamental part of banking business; core of banks
existence Interest and penalty are distinct concepts which may separately be demanded.
ISSUE # 3 Did the execution of the mortgage novate the contract?
RATIO NO. Petitioners acknowledge that there is no express stipulation that the mortgage is intended to supersede the loan
agreement..

EASTERN SHIPPING LINES, INC., petitioner, vs.CA AND MERCANTILE INSURANCE COMPANY, INC.,
respondents.
December 4, 1981,
Two fiber drums of riboflavin were shipped from Yokohama, Japan for delivery vessel "SS EASTERN COMET"owned by
defendant Eastern Shipping Lines. The shipment was insured under plaintiff's Marine Insurance Policy No. 81/01177 for
P36,382,466.38. Upon arrival of the shipment in Manila on December 12, 1981, it was discharged unto the custody of
defendant Metro Port Service, Inc. The latter excepted to one drum, said to be in bad order, which damage was unknown to
plaintiff. On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro Port
Service, Inc., one drum opened and without seal. On January 8 and 14, 1982, defendant Allied Brokerage Corporation made
deliveries of the shipment to the consignee's warehouse. The latter excepted to one drum which contained spillages, while the
rest of the contents was adulterated/fake. Plaintiff contended that due to the losses/damage sustained by said drum, the
consignee suffered losses totaling P19,032.95, due to the fault and negligence of defendants. Claims were presented against
defendants who failed and refused to pay the same
As a consequence of the losses sustained, plaintiff was compelled to pay the consignee P19,032.95 under the aforestated
marine insurance policy, so that it became subrogated to all the rights of action of said consignee against defendants.

ISSUE:a) whether the payment of legal interest on an award for loss or damage is to be computed from the time the complaint
is filed or from the date the decision appealed from is rendered; and (b) whether the applicable rate of interest, referred to
above, is twelve percent (12%) or six percent (6%).
The legal interest to be paid is (6%) on the amount due computed from the decision dated
03 February 1988. A 12% interest, in lieu of (6%), shall be imposed on such amount upon finality of this decision until the
payment thereof.
Eastern Shipping Lines being the carrier and not having been able to rebut the presumption of fault, is, in any event, to be held
liable in this case.
The factual circumstances may have called for different applications, guided by the rule that the courts are vested with
discretion, depending on the equities of each case, on the award of interest. By way of clarification and reconciliation, the
following are rules of thumb for future guidance.
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the
contravenor can be held liable for damages. The provisions under Title XVIII on "Damages"of the Civil Code govern in
determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as
well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the
interest due should be that which may have been stipulated in writing.Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded.In the absence of stipulation, the rate of interest shall be 12% per annumto be
computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the
Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages
awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established with reasonable certainty.Accordingly,
where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal
interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case
falls under paragraph 1 or paragraph 2, above, shall be 12% per annumfrom such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of credit.

Producers Bank of the Philippines (First International Bank) vs. Court of Appeals, et al.,
G.R. No. 115324. February 19, 2003
FACTS:
In 1979, respondent Vives was invited Angeles Sanchez to help one Doronilla, in incorporating his business, Sterela Marketing and
Services. Sanchez asked private respondent to deposit in a bank a certain amount of money in the bank account of Sterela for purposes
of its incorporation. She assured private respondent that he could withdraw his money from said account within a months time.
Respondent asked Sanchez to bring Doronilla to their house so that they could discuss Sanchezs request.
On 9th of May of the same year, respondent, issued a check in the amount of Two Hundred Thousand Pesos (P200,000.00) in favor of
Sterela after. Respondent instructed his wife, Mrs. Inocencia Vives, to accompany Doronilla and Sanchez in opening a savings account
in the name of Sterela in the Buendia, Makati branch of Producers Bank of the Philippines. However, only Sanchez, Mrs. Vives and
Dumagpi went to the bank to deposit the check. They had with them an authorization letter from Doronilla authorizing Sanchez and
her companions, "in coordination with Mr. Rufo Atienza," to open an account for Sterela Marketing Services in the amount of
P200,000.00. In opening the account, the authorized signatories were Inocencia Vives and/or Angeles Sanchez. A passbook for
Savings Account No. 10-1567 was thereafter issued to Mrs. Vives.
Consequently respondent learned that Sterela was no longer holding office in the address previously given to him. He and his wife
went to the Bank to check if their money was still compact. Mr. Rufo Atienza, the assistant manager, who informed them that part of
the money in Savings Account No. 10-1567 had been withdrawn by Doronilla, and that only P90,000.00 remained therein.
Respondent tried to get in touch with Doronilla through Sanchez. On June 29, 1979, he received a letter from Doronilla, assuring him
that his money was intact and would be returned to him. On August 13, 1979, Doronilla issued a postdated check for Two Hundred

Twelve Thousand Pesos (P212,000.00) in favor of respondent. However the check was dishonored. Doronilla requested private
respondent to present the same check on September 15, 1979 but when the latter presented the check, it was again dishonored.
After written demand upon Doronilla for the return of the money. Doronilla issued another check for P212,000.00 in private
respondents favor but the check was again dishonored for insufficiency of funds.
Private respondent instituted an action for recovery of sum of money in the Regional Trial Court (RTC) in Pasig, Metro Manila against
Doronilla, Sanchez, Dumagpi and petitioner.
Judgment was rendered sentencing defendants Arturo J. Doronila, Estrella Dumagpi and Producers Bank of the Philippines to pay
plaintiff Franklin Vives jointly and severally.
ISSUE: Whether or not the transaction was one of mutuum or commodatum.
RULING:
Petitioner contends that the transaction between private respondent and Doronilla is a simple loan (mutuum) since all the elements of a
mutuum are present: first, what was delivered by private respondent to Doronilla was money, a consumable thing; and second, the
transaction was onerous as Doronilla was obliged to pay interest, as evidenced by the check issued by Doronilla in the amount of
P212,000.00, or P12,000 more than what private respondent deposited in Sterelas bank account.
Private respondent, on the other hand, argues that the transaction between him and Doronilla is not a mutuum but an accommodation,
since he did not actually part with the ownership of his P200,000.00 and in fact asked his wife to deposit said amount in the account of
Sterela so that a certification can be issued to the effect that Sterela had sufficient funds for purposes of its incorporation but at the
same time, he retained some degree of control over his money through his wife who was made a signatory to the savings account and
in whose possession the savings account passbook was given.
No error was committed by the Court of Appeals when it ruled that the transaction between private respondent and Doronilla was a
commodatum and not a mutuum. A circumspect examination of the records reveals that the transaction between them was a
commodatum. Article 1933 of the Civil Code distinguishes between the two kinds of loans in this wise:
By the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for
a certain time and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the
condition that the same amount of the same kind and quality shall be paid, in which case the contract is simply called a loan or
mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing loaned, while in simple loan, ownership passes to the borrower.
The foregoing provision seems to imply that if the subject of the contract is a consumable thing, such as money, the contract would be
a mutuum. However, there are some instances where a commodatum may have for its object a consumable thing. Article 1936 of the
Civil Code provides:
Consumable 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.
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.
The rule is that the intention of the parties thereto shall be accorded primordial consideration in determining the actual character of a
contract. In case of doubt, the contemporaneous and subsequent acts of the parties shall be considered in such determination.
As correctly pointed out by both the Court of Appeals and the trial court, the evidence shows that private respondent agreed to deposit
his money in the savings account of Sterela specifically for the purpose of making it appear "that said firm had sufficient capitalization
for incorporation, with the promise that the amount shall be returned within thirty (30) days." Private respondent merely
"accommodated" Doronilla by lending his money without consideration, as a favor to his good friend Sanchez. It was however clear to
the parties to the transaction that the money would not be removed from Sterelas savings account and would be returned to private
respondent after thirty (30) days.
Doronillas attempts to return to private respondent the amount of P200,000.00 which the latter deposited in Sterelas account together
with an additional P12,000.00, allegedly representing interest on the mutuum, did not convert the transaction from a commodatum into
a mutuum because such was not the intent of the parties and because the additional P12,000.00 corresponds to the fruits of the lending
of the P200,000.00. Article 1935 of the Civil Code expressly states that "[t]he bailee in commodatum acquires the use of the thing
loaned but not its fruits." Hence, it was only proper for Doronilla to remit to private respondent the interest accruing to the latters
money deposited with petitioner.

Carolyn M. Garcia -vs- Rica Marie S. Thio

GR No. 154878, 16 March 2007
FACTS
Respondent Thio received from petitioner Garcia two crossed checks which amount to US$100,000 and US$500,000,
respectively, payable to the order of Marilou Santiago. According to petitioner, respondent failed to pay the principal amounts of the
loans when they fell due and so she filed a complaint for sum of money and damages with the RTC. Respondent denied that she
contracted the two loans and countered that it was Marilou Satiago to whom petitioner lent the money. She claimed she was merely
asked y petitioner to give the checks to Santiago. She issued the checks for P76,000 and P20,000 not as payment of interest but to
accommodate petitioners request that respondent use her own checks instead of Santiagos.
RTC ruled in favor of petitioner. CA reversed RTC and ruled that there was no contract of loan between the parties.
ISSUE
(1) Whether or not there was a contract of loan between petitioner and respondent.
(2) Who borrowed money from petitioner, the respondent or Marilou Santiago?
HELD
(1)
The Court held in the affirmative. A loan is a real contract, not consensual, and as such I 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.
(2)
However, the checks were crossed and payable not to the order of the respondent but to the order of a certain Marilou
Santiago. Delivery is the act by which the res or substance is thereof placed within the actual or constructive possession or control of
another. Although respondent did not physically receive the proceeds of the checks, these instruments were placed in her control and
possession under an arrangement whereby she actually re-lent the amount to Santiago.
Petition granted; judgment and resolution reversed and set aside.

Pajuyo vs. CA & Guevarra

Facts:
Pajuyo and Guevarra executed a Kasunduan. Pajuyo, as owner of a house, allowed Guevarra to live in the house for free provided
Guevarra would maintain the cleanliness and orderliness of the house. Guevarra promised that he would voluntarily vacate the
premises on Pajuyos demand.
After some time, Pajuyo informed Guevarra of his need of the house, however, Guevarra refused to vacate the house. Hence, Pajuyo
filed an ejectment case against Guevarra in the MTC.
The MTC ruled in favor of Pajuyo and ordered Guevarra to vacate the lot. Pajuyo is the owner of the house, and he allowed Guevarra
to use the house only by tolerance. Thus, Guevarras refusal to vacate the house on Pajuyos demand made Guevarras continued
possession of the house illegal. The RTC upheld the Kasunduan, which established the landlord and tenant relationship between
Pajuyo and Guevarra. However, the Court of Appeals reversed the MTC and RTC rulings, which held that the Kasunduan between
Pajuyo and Guevarra created a legal tie akin to that of a landlord and tenant relationship. The Court of Appeals ruled that the
Kasunduan is not a lease contract but a commodatum because the agreement is not for a price certain.
Issue: Whether or not the Kasunduan voluntarily entered into by the parties was in fact a commodatum, instead of a Contract of Lease
as found by the MTC.
Ruling: No.
The Kasunduan reveals that the accommodation accorded by Pajuyo to Guevarra was not essentially gratuitous. While the Kasunduan
did not require Guevarra to pay rent, it obligated him to maintain the property in good condition. The imposition of this obligation
makes the Kasunduan a contract different from a commodatum. The effects of the Kasunduan are also different from that of a
commodatum.
Even assuming that the relationship between Pajuyo and Guevarra is one of commodatum, Guevarra as bailee would still have the duty
to turn over possession of the property to Pajuyo, the bailor. The obligation to deliver or to return the thing received attaches to
contracts for safekeeping, or contracts of commission, administration and commodatum. These contracts certainly involve the
obligation to deliver or return the thing received.

PEOPLE vs. PUIG & PORRAS G.R. No. 173654-765 | 28 August 2008
ISSUE WON the 112 information for qualified theft sufficiently allege the element of taking without the consent of the owner, and the
qualifying circumstance of grave abuse of discretion
HELD YES. The Court has held in a line of cases that where the Informations merely alleged the positions of the respondents; that the
crime was committed with grave abuse of confidence, with intent to gain and without the knowledge and consent of the Bank, without
necessarily stating the phrase being assiduously insisted upon by respondents, of a relation by reason of dependence, guardianship or
vigilance, between the respondents and the offended party that has created a high degree of confidence between them, which
respondents abused, and without employing the word owner in lieu of the Bank were considered to have satisfied the test of
sufficiency of allegations. Allegations in the Information that such employees acted with grave abuse of confidence, to the damage and
prejudice of the Bank, without particularly referring to it as owner of the money deposits, as sufficient to make out a case of Qualified
Theft. Depositors who place their money with the bank are considered creditors of the bank. Tellers, Cashiers, Bookkeepers and other
employees of a Bank who come into possession of the monies deposited therein enjoy the confidence reposed in them by their
employer. Banks, on the other hand, where monies are deposited, are considered the owners thereof. The relationship between banks
and depositors has been held to be that of creditor and debtor, by virtue of Art. 1980, CC, which provides that fixed, savings, and
current deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loans, and
corollarily thereto, Art. 1953, CC provides that a person who receives a loan of money or any other fungible thing acquires the
ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.