X and Y entered into a contract. X agreed to deposit ₱50,000 with Y's account to make it appear that Y had sufficient capitalization in forming an incorporation. They agreed that Y should return the money plus 12% interest within 30 days. What is the nature of the contract?
A)Mutuum, because of the stipulation as to interest.
B)Mutuum, because Y acquired ownership upon depositing the amount in his account.
C)Commodatum, because Y never acquired ownership over the money as he was under obligation to return it and it was only for purposes of exhibiting that he had sufficient capital.
D)Commodatum, because the stipulation for the payment of interest did not convert it to mutuum.

Question

Quizplus · Accepted Answer

Commodatum is a contract where one of the parties delivers to another something not consumable, so that the latter may use it for a certain time and then return it. In this case, X delivered the money to Y so that Y could use it to make it appear that he had sufficient capitalization in forming an incorporation. Y was under obligation to return the money and it was only for purposes of exhibiting that he had sufficient capital. Therefore, the contract is a commodatum.

X and Y Entered into a Contract