PAJUYO VS.

CA

FACTS
Pajuyo entrusted a house to Guevara for the latter's use provided he should
return the same upon demand and with the condition that Guevara should be
responsible of the maintenance of the property. Upon demand Guevara refused to
return the property to Pajuyo. The petitioner then filed an ejectment case against
Guevara with the MTC who ruled in favor of the petitioner.

On appeal with the CA, the appellate court reversed the judgment of the lower
court on the ground that both parties are illegal settlers on the property thus have no
legal right so that the Court should leave the present situation with respect to
possession of the property as it is, and ruling further that the contractual relationship of
Pajuyo and Guevara was that of a commodatum.

The MTC and RTC ruled in favor of Pajuyo. CA reversed the decision of MTC
and RTC declaring that Pajuyo and Guevarra were illegal settlers, that the lot in
question is actually owned by the government. CA further ruled that the contract is not a
lease but a commodatum because the agreement is not for a price certain.

ISSUE
WON the contract is a commodatum.

RULING
The Court ruled in the negative. The contract was not a commodatum but a
precarium. In a contract of commodatum, one of the parties delivers to another
something not consumable so that the latter may use the same for a certain time and
return it. Essential features of commodatum are as follows: it is gratuitous; and the use
of the thing belonging to another is for a certain period

The bailor therefore cannot ask for the return of the item lent up until the end of
the period specified, or following completion of the purpose of the commodatum
constituted.

If the bailor should require the money immediately, he can ask for its return in
exchange for a temporary use. If something is only tolerable when used he might
request the return of the money held by the bailor if anything can be changed at will, the
contractual. A precarium is a type of relationship that commodatum.

Article 1947 of the New Civil Code defined precarium as a kind of commodatum
where the bailor may demand the thing at will. It is a contract by which the owner of a
thing, at the request of another person, gives the latter the thing for use as long as the
owner shall please.
 PRODUCERS BANK VS. CA

FACTS
In 1979, private respondent Vives was asked by his neighbor and friend Sanchez
to help her friend incorporate his business (Sterela) Sanchez asked Vives to deposit in
a bank a certain amount of money in the bank account of Sterela. She assured Vives
that he could withdraw his money within months’ time.

Vives learned that Sterela was no longer holding office in the address given to
him. He went to the Bank to verify if their money was still intact. Atienza told them that
part of the money had been withdrawn by Doronilla, and that only P90k remained.

Doronilla Bank issued 3 postdated checks, all ofwhich were dishonored. Vives
received a letter from Doronilla assuring that his money was intact and would be
returned. However, the bank again issued a postdated check for P212k in favor of
Vives.

Doronilla issued another check but was again dishonored for insufficiency of
funds. Vives filed an action for recovery of money in the RTC against Doronilla,
Sanchez, Dumagpi and Producers Bank. RTC rendered a decision in favor of Vives.

Petitioner contends that the transaction between private respondent and

Doronilla is a loan (mutuum) since all the elements of a mutuum are present: first, what
was delivered by private respondent to Doronillas was money, a consumable thing; and
second, Doronila was obligated to pay interest, as evidenced by the fact that she wrote
a check for P212k.

ISSUE
Whether or not the transaction between Doronilla and Vives was one of simple
loan or mutuum.

RULING
No. it was a commodatum. Article 1933 of the Civil Code distinguishes between
the two kinds of loans in this wise: By the contract of loan, one of the parties delivers to
another, either something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a commodatum; or money
or other consumable thing, upon the condition that the same amount of the same kind
and quality shall be paid, in which case the contract is simply called a loan or mutuum.

In commodatum, the bailor retains the ownership of the thing loaned, while in a
simple loan, ownership passes to the borrower. Simple loan may be gratuitous or with a
stipulation to pay interest. Commodatum is essentially gratuitous and implies that the
subject of the contract is not a consumable thing.

REPUBLIC OF THE PHILIPPINES VS. BAGTAS

FACTS
Jose Bagtas borrowed from the Bureau of Animal Industry three bulls for a period
of one year for breeding purposes subject to a government charge of breeding fee of
10% of the book value of the books.

Upon the expiration of the contract, Bagtas asked for a renewal for another one
year, however, the Secretary of Agriculture and Natural Resources approved only the
renewal for one bull and other two bulls be returned.

Bagtas then wrote a letter to the Director of Animal Industry that he would pay
the value of the three bulls with a deduction of yearly depreciation.

The Director advised him that the value cannot be depreciated and asked Bagtas
to either return the bulls or pay their book value. Bagtas neither paid nor returned the
bulls. The Republic then commenced an action against Bagtas ordering him to return
the bulls or pay their book value. 

Felicidad Bagtas, the surviving spouse and administrator of Bagtas' estate,

returned the two bulls and filed a motion to quash the writ of execution since one bull
cannot be returned for it was killed by gunshot during a Huk raid.

The Court denied her motion hence, this appeal certified by the Court of Appeals
because only questions of law are raised.

ISSUE
WON the contract is commodatum

RULING
A contract of commodatum is essentially gratuitous. Supreme Court held
that Bagtas was liable for the loss of the bull even though it was caused by a fortuitous
event. If the contract was one of lease, then the 10% breeding charge is compensation
(rent) for the use of the bull and Bagtas, as lessee, is subject to the responsibilities of a
possessor. He is also in bad faith because he continued to possess the bull even
though the term of the contract has already expired. 

If the contract was one of commodatum, he is still liable because: (1) he kept the
bull longer than the period stipulated; and (2) the thing loaned has been delivered with
appraisal of its value (10%). No stipulation that in case of loss of the bull due to
fortuitous event the late husband of the appellant would be exempt from liability. 
 CATHOLIC VICAR V. CA

FACTS
Catholic Vicar Apostolic of the Mountain Province (Vicar) filed with the court an
application for the registration of lots 1, 2, 3 and 4 in Benguet province on January 13,
1962.

1963: Heirs of Juan Valdez and Heirs of Egmidio Octaviano claimed that they
have ownership over lots 1, 2 and 3. (2 separate civil cases) 1965: The land registration
court confirmed the registrable title of Vicar to lots 1, 2, 3 and 4. Upon appeal by the
private respondents (heirs), the decision of the lower court was reversed. Title for lots 2
and 3 were cancelled.

VICAR has petitioned the Supreme Court for review on certiorari of the decision
of the Court of Appeals dismissing his application for registration of Lots 2 and 3. The
Heirs of Octaviano presented none (1) witness, who testified on the alleged ownership
of the land in question (Lot 3).

Vicar Brasseur admitted that if called to the witness stand, Vicar Vicar has been
in possession of Lot.3, for 75 years continuously and peacefully and has constructed
permanent structures thereon. The land in question is not covered by any title in the
name of Egmidio Octaviano or any of the heirs.

ISSUE
WON Vicar had been in possession of lots 2 and 3 merely as bailee borrower in
commodatum, a gratuitous loan for use.

RULING
YES. Private respondents were able to prove that their predecessors' house was
borrowed by petitioner Vicar after the church and the convent were destroyed. They
never asked for the return of the house, but when they allowed its free use, they
became bailors in commodatum and the petitioner the bailee.

Petitioner Vicar did not meet the requirement of 30 years possession for
acquisitive prescription over Lots 2 and 3. The appellate court did not believe the
findings of the trial court that the bailees' failure to return the subject matter to the bailor
did not mean adverse possession.
 QUINTOS V. BECK

FACTS
BECK was a tenant of the Quintos and as such occupied the latter's house on M.
H. del Pilar street, No. 1175. On January 14. In 1936, when BECK and Quintos signed a
lease for the property in question, the former gratuitously granted to the latter the use of
the furniture. This was on the condition that they would be returned to him upon the
latter's death. On November 15th, before vacating the house, the BECK deposited with
the Sheriff all the furniture belonging to Quintos and they are now on deposit in the
Sheriff's warehouse. The furniture is located at No. 1521, Rizal Avenue, in the custody
of the said sheriff.

ISSUE
1. WON BECK complied with his obligation to return the furniture upon the
Quintos’ demand.
2. WON Quintos is bound to bear the deposit fees.
3. WON Quintos is entitled to the costs of litigation.

RULING
1. No. The contract entered into between the parties is one of commadatum,
because under it Quintos gratuitously granted the use of the furniture to
BECK, reserving for herself the ownership thereof; by this contract he bound
himself to return the furniture to Quintos, upon the latter’s demand (clause 7
of the contract, Exhibit A; articles 1740, paragraph 1, and 1741 of the Civil
Code). The obligation voluntarily assumed by BECK to return the furniture
upon demand, means that he should return all of them to Quintos at the
latter's residence or house. BECK did not comply with this obligation when he
merely placed them at the disposal of the Quintos, retaining for his benefit the
three gas heaters and the four eletric lamps. The provisions of article 1169 of
the Civil Code cited by counsel for the parties are not squarely applicable.
The trial court, therefore, erred when it came to the legal conclusion that the
Quintos failed to comply with her obligation to get the furniture when they
were offered to her.

2. No. The Court found that the Bailee was not entitled to place the furniture on
deposit; nor was she under a duty to accept the offer to return it.

3. Yes. The costs in both instances should be borne by BECK because the
plaintiff is the prevailing party (section 487 of the Code of Civil Procedure). He
was the one who breached the contract of commodatum, and without any
 reason he refused to return and deliver all the furniture upon demand. In
these circumstances, it is just and equitable that he pay the legal expenses
and other judicial costs which the plaintiff would not have otherwise defrayed.

JARDIN V. HALLASCO

FACTS
In 1920, Catalino, Galo and Sixto Hallasgo partitioned in a private document the
properties of their spouses i.e. some residential lot, cornland, parcel of land, and
riceland. Catalino and Galo each received, as their share, 495 sqms. and 7 coconut
trees. The remainder of the lot and 7 coconut trees were allotted to Maura's child by her
first husband.

Galo ceded part of his share of the riceland in Barrio Sagpolon to become the
owner of 990 sqm of a poblacion lot. Galo later ceded 495 sqm to Catalino in exchange
for Catalino's one-half-share of the same area. Catalino became the sole owner of the
lot, while Galo was left with just 90 sqm.

A complaint was filed in 1973 against Sixto Galo and Catalino del Rosario for
fraudulently claiming part of the poblacion lot he used as a garden. Galo's heirs were
not entitled to any share of harvests due to the partitioned lands and that they had been
in possession for a long time.

ISSUE
WON the action of Catalino's children for the recovery of the 350 sqm. portion
from Sixto's heirs has prescribed.

RULING
No. Article 494 of the Civil Code provides that "no co-owner shag be obliged to
remain in the co-ownership" and that "each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share is concerned". It also
provides that "no prescription shall run in favor of a co-owner or co-heir against his co-
owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

While the action for the partition of the thing owned in common (actio communi
dividendo or actio familiae erciscundae) does not prescribe, the co-ownership does not
last forever since it may be repudiated by a co-owner. In such a case, the action for
partition does not lie. What may be brought by the aggrieved co-owner is an  accion
reivindicatoria or action for recovery of title and possession. That action may be barred
by prescription.

In the instant case, as the partition was made in 1920 and the plaintiffs did not
specify when Sixto Hallasgo repudiated the co-ownership of the lands in Composanto
and Calabugon, the trial court assumed that prescription started to run even before the
Civil Code took effect. Under the Code of Civil Procedure, a period of ten years was the
maximum period for acquisitive and extinctive prescription. Hence, the trial court
concluded that the 1973 action was barred by prescription.