Carolyn M. Garcia, Petitioner, vs. Rica Marie S. Thio, Respondent. 16 March 2007 1st Division G.R. No.

154878

Ponente: Facts:

Justice Corona

In February and June 1995, respondent received from petitioner crossed checks in the amount of US$100,000.00 and P500,000.00 with monthly interest at 3% and 4%, respectively. These checks were payable to the order of one Marilou Santiago. When respondent failed to pay the amounts, petitioner filed a complaint with the RTC which rendered judgment in her favor. On appeal to the Court of Appeals, the decision of the RTC was reversed. The CA ruled that there was no contract of loan between the parties as the record shows that petitioner failed to substantiate her claim that respondent indeed borrowed money from her because the crossed checks issued by her was payable to the order of Marilou Santiago. Issue: Whether or not there is a contract of loan Decision: Petition granted. A loan is a real contract, not consensual, and as such is perfected only upon the delivery of the object of the contract. This is evident in Art. 1934 of the Civil Code which provides: An accepted promise to deliver something by way of commodatum or simple loan is binding upon the parties, but the commodatum or simple loan itself shall not be perfected until the delivery of the object of the contract. Upon delivery of the object 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. 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 amounts to Santiago.