Producers Bank v CA Priv Respondent Franklin Vives was asked by Angeles Sanchez (neighbor) to help her friend Colonel

Arturo Doronilla, in incorporating his business, Sterela Marketing. o The specific request was that Vives deposit a certain amount of money in the bank account of Sterela for its incorporation. o He was assured that he would be able to w/draw his money w/in a month. All them (along with Dumagpi, Doronillas Secretary) met and discussed. Vives issued a check worth 200k in favour of Sterela. In opening the bank account, the authorized signatories were Innocencia Vives and Angela Sanchez. o They were given an authorization letter by Doronillla to open an account for Sterela in the amount of 200k Later on, Vives would find out that Sterela no longer operates in the address given to him. He and his wife checked the bank verify if their money was still in it. o Doronilla had already withdrawn 110k. o They could not withdraw the rest since it had to answer for some post-dated check issued by Doronilla. Vives tried to get in touch with Doronilla. o Doronilla assured them that the money was intact. o Donorilla assued a postdated check for 212K. o The check was dishonoured. o This happened twice. Upon advice of a lawyer, they finally sued Doronilla, Sanchez, and Producers Bank.

The bank would argue that it was a simple loan because: 1. What was delivered was money, a consumable thing. 2. Doronilla was obliged to pay interest, as evidenced by the check issued by Doronilla in the amont of 212k by way of Doronillas payment of interest. o Hence, the bank argues that it could not be held liable for the return of the 200k to Vives since it is not privy to the transaction. SC: It was a commodatum. 1. Even if what was delivered was money, there are certain instances where a commodatum would have a consumable thing as its object: a. Purpose of the contract is for the exhibition of the object b. The intention of the parties is to lend the consumable and to have the VERY SAME GOODS returned at the end of the period. (Such as this case) - The money was specifically for the purpose of making it appear that the firm had sufficient capitalization for incorporation. - Vives merely accommodated Doronilla by lending his money w/o consideration.

2. It was w/o consideration, despite the banks assertion that Doronilla issued a check worth 212k. - In a commodatum, the bailee is entitled to the use but NOT to the fruits. - Hence, it was only proper for Doronilla to remit to Vives the interest As another issue, the SC held that whether or not the transaction was a mutuum or a commodatum, the bank cannot escape liability because it clearly showed that Mr. Atienza (its employee) was partly liable. o Withdrawals must be made by the depositor personally or upon his written authority.

One of the issues was whether or not the transaction between Doronilla and Vives was a simple loan or an accommodation (commodatum).