Case Digest: In re: Tomboco, G.R. No. 10900, October 8, 1917

Commercial Law | Mutuum

In re guardianship of the minors FELIPE and ANTONIO TAMBOCO, TAN ENG and TAN LINJO. DONATO CHUATONGCO

Facts: 
  • On January 1, 1910, Justina Plaza of Surigao, acting as guardian of her minor children, entrusted the sum of P2,241.32 to the mercantile firm of Quian Sieng & Co.         
  • Donato Chuatongco, as manager of the firm, issued a receipt acknowledging the receipt of the money, promising to render an account to Justina Plaza upon her request.
    • I hereby certify that the mercantile firm Quian Sieng & Co. has received from Justina Plaza, widow of Tamboco, in her capacity of guardian of the persons and property of the minor children of said Tamboco, the sum of two thousand, two hundred and forty-one pesos and thirty-two centavos owing to the said estate, of which sum said firm will render an account to the interested party [Justina Plaza] as son as she so requires.
    • SURIGAO,           January 1, 1910.
    • (Sgd.) DONATO CHUATONGCO. 
  • In November 1914, the Court of First Instance of Surigao ordered Chuatongco to deposit the money into the Postal Savings Bank or the Agricultural Bank in the name of the minors or provide security by giving a duly registered and approved mortgage upon real property of the value of not less than P3,000.
  • Chuatongco failed to do so.
  • In March 1915, the court subsequently ordered to arrest and commit Chuatongco to jail until compliance or release according to law. 
  • Chuatongco appealed, arguing that the order was unauthorized.
Issue: 
  • Whether the lower court erred in making the order in question. YES
Held:
We are of the opinion that the order appealed from was unauthorized. It is true that section 611 of the Code of Civil Procedure gives a court exercising probate jurisdiction the power to commit a person to jail for failure to obey its order, sentence, or decree; but it is declared in the proviso to the same section that nothing therein shall be construed to authorize imprisonment for ordinary debt. 

It is evident that the receipt executed by Donato Chuatongco in favor of Justina Plaza is a mere acknowledgment of indebtedness, and that the delivery of the money to him constituted a loan. The transaction in question therefore created an ordinary debt, such as is contemplated in the proviso to section 611 of the Code of Civil Procedure. 

That the transaction in question does not constitute a technical deposit is also apparent from the circumstance that it was agreed between the parties that the firm of Quian Sieng & Co. should pay interest at the rate of P100 per annum; from which it is manifest that the firm had the right to utilize the money in its business, as was in fact done. This constitutes a loan. (

The agreement for the payment of interest in this case, was not expressed in the receipt, but this is not material. Furthermore, if the money was used by the firm with the consent of Justina Plaza, as appears to have been the case, the obligation was converted into a loan under article 1768 of the Civil Code even supposing that it had originally been a deposit.

It follows from the foregoing opinion that the order of the court below, dated March 27, 1915, committing the appellant, Donato Chuatongco, to jail for failure to comply with its prior order dated November 17, 1914, was improper and should be vacated, with costs of this instance de officio. So ordered.

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