Article 1933 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. (1740a) 1. People v. Concepcion, 44 Phil. 126, G.R. No. 19190, November 22, 1922. PEOPLE vs. CONCEPCION, 44 Phil. 126 The credit of an individual means his ability to borrow money by virtue of the trust or confidence reposed by a lender that he will pay what he may promise. A loan means the delivery by one party and the receipt by the other of a given sum of money, upon an agreement, express or implied, to repay the sum loaned, with or without interest. The concession of a credit necessarily involves the granting of loans up to the limit of the amount fixed in the credit. To discount a paper is only a mode of loaning money, with the following distinctions: a. In a discount, interest is deducted in advance, while in a loan, interest is taken at the expiration of a credit; b. A discount is always on a double--name paper; a loan is generally on a single--name paper FACTS: Venancio Concepcion, President of the Philippine National Bank and a member of the Board thereof, authorized an extension of credit in favor of "Puno y Concepcion, S. en C. to the manager of the Aparri branch of the Philippine National Bank. "Puno y Concepcion, S. en C." was a co-partnership where Concepcion is a partner. Subsequently, Concepcion was charged and found guilty in the Court of First Instance of Cagayan with violation of section 35 of Act No.2474 which provides that the National Bank shall not directly or indirectly grant loans to any of the members of the board of directors of the bank nor to agents of the branch banks. Counsel for the defense argues that the documents of record do not prove that authority to make a loan was given, but only show the concession of a credit. They averred that the granting of a credit to the copartnership "Puno y Concepcion, S. en C." by Venancio Concepcion, President of the Philippine National Bank, is not a "loan" within the meaning of section 35 of Act No. 2747. ISSUE:

Whether or not the granting of a credit of P300,000 to the co-partnership "Puno y Concepcion, S. en C." by Venancio Concepcion, President of the Philippine National Bank, a "loan" within the meaning of section 35 of Act No. 2747. HELD: The Supreme Court ruled in the affirmative. The "credit" of an individual means his ability to borrow money by virtue of the confidence or trust reposed by a lender that he will pay what he may promise. A "loan" means the delivery by one party and the receipt by the other party of a given sum of money, upon an agreement, express or implied, to repay the sum loaned, with or without interest. The concession of a "credit" necessarily involves the granting of loans" up to the limit of the amount fixed in the "credit".