G.R. No. 205578. March 1, 2017.: Jalandoni Vs Encomienda

UA&P 2JD1 – Credit Transactions | S.Y.
2020-2021
G.R. No. 205578. March 1, 2017.
Jalandoni vs Encomienda
MAIN TOPIC – Proof and Nature of Simple Loan
FACTS
● Carmen Encomienda and Geogia Jalandoni became close friends after a purchase transaction in Cebu. Encomienda
bought a Condominium while Jalandoni was the real estate broker.
● Jalandoni called Encomienda to ask if she could borrow money for the search and rescue operation of her children
in Manila, who were allegedly taken by their father, Luis Jalandoni. Encomienda handed P100,000.00.
● Jalandoni again borrowed on April 1, 1997 another P 1 Million from Encomienda and promised that she would pay
the same when her money in the bank matured. Later on, the same still borrowed (as she cried) an additional
P900,000.00. Encomienda still acceded, albeit already feeling annoyed. All in all, Encomienda spent around
P3,245,836.02 and $6,638.20 for Jalandoni.
● Encomienda then later gave Jalandoni six (6) weeks to settle her debts and despite several demands, no payment
was made. Jalandoni insisted that the amounts given were not in the form of loans. Encomienda filed a complaint.
● Jalandoni’s defense is that there was never a discussion or even just an allusion about a loan because Encomienda
told her that the money is to “extend some help and that it was not a loan”. It was gratuitous. There were no pieces
of documentary evidence to support that there was indeed a contract of loan. Encomienda was just displaying mere
Christian help to her.
● RTC dismissed the case. Encomienda brought the case to the CA, which granted the said appeal and ordered
Jalandoni to pay the sum of P 3, 245, 836. 02 and US $ 6, 638.20 plus legal interest of 12% from August 1997 the
date of extrajudicial demand, and attorney’s fees and expenses of litigation of P100, 000. Jalandoni filed a motion
for reconsideration but the same was denied, hence the instant petition.
ISSUE
● Whether or not the transaction between Encomienda and Jalandoni is a contract of loan despite the absence of a
formal document.
HELD
● YES, the transaction is still a contract of loan. Art. 1953 of the New Civil Code provides that a simple loan or
mutuum exists when a person receives a loan of money or any other fungible thing and acquires its ownership. He
is bound to pay to the creditor the equal amount of the same kind and quality. Also under the same code, contracts
are binding between the parties, whether oral or written. Harmonizing these two laws, when the elements of a
simple loan are present and the contract can be written or oral, a contract of loan can exist even without a written
document especially among friends or relatives where the relationship is more real and natural than business
relationships. In the case at bar, Jalandoni received money for all those uses when she came to Encomienda for
help while Encomienda kept the receipts even for the smallest amounts she had advanced, repeatedly sent demand
letters, and immediately filed the instant case when Jalandoni stubbornly refused to heed her demands sufficiently
disproves the latter's belief that all the sums of money she received were merely given out of charity. Therefore,
the transaction is a contract of loan.
DISPOSITIVE PORTION
WHEREFORE, PREMISES CONSIDERED, the Court DISMISSED the petition for lack of merit and AFFIRMS
the Decision of the Court of Appeals, Cebu City dated March 29, 2012 and its Resolution dated December 19, 2012 in CA-
G.R. CV No. 01339, with MODIFICATION as to the interest which must be twelve percent (12%) per annum of the amount
awarded from the time of demand on August 14, 1997 to June 30, 2013, and six percent (6%) 13 per annum from July 1,
2013 until its full satisfaction. SO ORDERED.
DOCTRINE
The existence of a contract of loan cannot be denied merely because it was not reduced in writing. In the case of
loans between friends and relatives, the absence of acknowledgement receipts or promissory notes is more natural and real as
long as another person receives a loan of money or any other fungible thing and acquires its ownership.
Ponente: Peralta, J.
Digest Maker: TORAYNO, Kriztia Credenda

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UA&P 2JD1 – Credit Transactions | S.Y.

G.R. No. 205578. March 1, 2017.

MAIN TOPIC – Proof and Nature of Simple Loan

Digest Maker: TORAYNO, Kriztia Credenda

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