Title SILVESTRA BARON, plaintiff-appellant, vs.

PABLO DAVID, defendant-appellant,

And

UILLERMO BARON, plaintiff-appellant, vs. PABLO DAVID, defendant-appellant.

G.R. Nos. & Date 26948 & 26949, 8 October 1927
Ponente Street, J.
Doctrine
Facts  These two actions were instituted in the CFI of the Province of Pampanga by
Silvestra Baron and Guillermo Baron, for the purpose of recovering from the
defendant, Pablo David, the value of palay alleged to have been sold by the
plaintiffs to the defendant in the year 1920.
 Prior to January 1921, the defendant Pablo David had been engaged in
running a rice mill in Magalang, Pampanga. On the date stated, a fire
occurred that destroyed the mill and its contents.
 In the months of March, April, and May, 1920, Silvestra Baron placed a
quantity of palay in the defendant's mill; and this, in connection with some
that she took over from Guillermo Baron, amounted to 1,012 cavans and 24
kilos.
 During approximately the same period Guillermo Baron placed other 1,865
cavans and 43 kilos of palay in the mill.
 No compensation has ever been received by Silvestra Baron upon account of
the palay thus placed with the defendant.
 As against the palay delivered by Guillermo Baron, he has received from the
defendant advancements amounting to P2,800; but apart from this he has
not been compensated. Hence, the civil action.
Trial Court/s  Ruled against David and held him liable to Baron

Appellate Court 

Arguments Petitioner [BARON] Respondent [DAVID]

 Their palay was delivered to the defendant at  He is not liable due to
his special request, coupled with a promise on the fire which
his part to pay for the same at the highest price destroyed his rice mill
per cavan at which palay would sell during the and its contents
year
Issue/s Whether David is liable to pay the amount of palay owned by Baron. (YES)
SC Ruling Even supposing that the palay may have been delivered in the character of
deposit, subject to future sale or withdrawal at plaintiffs' election, nevertheless if
it was understood that the defendant might mill the palay and he has in fact
appropriated it to his own use, he is of course bound to account for its value.

Under article 1768 of the Civil Code, when the depositary has permission to make
use of the thing deposited, the contract loses the character of mere deposit and
becomes a loan or a commodatum; and of course, by appropriating the thing, the
bailee becomes responsible for its value.

In this connection we wholly reject the defendant's pretense that the palay
delivered by the plaintiffs or any part of it was actually consumed in the fire . Nor
is the liability of the defendant in any wise affected by the circumstance that, by
a custom prevailing among rice millers in this country, persons placing palay with
them without special agreement as to price are at liberty to withdraw it later,
proper allowance being made for storage and shrinkage, a thing that is
sometimes done, though rarely.