Pajuyo v.

CA
GR No. 146364 June 3, 2004

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.

Issue: Is the contractual relationship of Pajuyo and Guevara that of a

commodatum?

Held: No. The Court of Appeals theory that the Kasunduan is one of
commodatum is devoid of merit. 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. An essential feature of
commodatum is that it is gratuitous. Another feature of commodatum is
that the use of the thing belonging to another is for a certain period. Thus,
the bailor cannot demand the return of the thing loaned until after
expiration of the period stipulated, or after accomplishment of the use for
which the commodatum is constituted. If the bailor should have urgent
need of the thing, he may demand its return for temporary use. If the use of
the thing is merely tolerated by the bailor, he can demand the return of the
thing at will, in which case the contractual relation is called a precarium.
Under the Civil Code, precarium is a kind of commodatum. The
Kasunduan reveals that the accommodation accorded by Pajuyo to
Guevarra was not essentially gratuitous. While the Kasunduan did not
require Guevarra to pay rent, it obligated him to maintain the property in
good condition. The imposition of this obligation makes the Kasunduan a
contract different from a commodatum. The effects of the Kasunduan are
also different from that of a commodatum. Case law on ejectment has
treated relationship based on tolerance as one that is akin to a landlord-
tenant relationship where the withdrawal of permission would result in the
termination of the lease. The tenants withholding of the property would
then be unlawful.
Catholic Vicar Vs. CA
Date: September 31, 1988

Facts:
- 1962: Catholic Vicar Apostolic of the Mountain Province (Vicar),
petitioner, filed with the court an application for the registration of title
over lots 1, 2, 3 and 4 situated in Poblacion Central, Benguet, said lots being
used as sites of the Catholic Church, building, convents, high school
building, school gymnasium, dormitories, social hall and stonewalls.
- 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 filed with the Supreme Court a petition for review on certiorari of
the decision of the Court of Appeals dismissing his application for
registration of Lots 2 and 3.
- During trial, the Heirs of Octaviano presented one (1) witness, who
testified on the alleged ownership of the land in question (Lot 3) by their
predecessor-in-interest, Egmidio Octaviano; his written demand to Vicar
for the return of the land to them; and the reasonable rentals for the use of
the land at P10,000 per month. On the other hand, Vicar presented the
Register of Deeds for the Province of Benguet, Atty. Sison, who testified
that the land in question is not covered by any title in the name of Egmidio
Octaviano or any of the heirs. Vicar dispensed with the testimony of Mons.
Brasseur when the heirs admitted that the witness if called to the witness
stand, would testify that Vicar has been in possession of Lot 3, for 75 years
continuously and peacefully and has constructed permanent structures
thereon.

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

Held: 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.

The bailees' failure to return the subject matter of commodatum to the

bailor did not mean adverse possession on the part of the borrower. The
bailee held in trust the property subject matter of commodatum. The
adverse claim of petitioner came only in 1951 when it declared the lots for
taxation purposes. The action of petitioner Vicar by such adverse claim
could not ripen into title by way of ordinary acquisitive prescription
because of the absence of just title.

The Court of Appeals found that petitioner Vicar did not meet the
requirement of 30 years possession for acquisitive prescription over Lots 2
and 3. Neither did it satisfy the requirement of 10 years possession for
ordinary acquisitive prescription because of the absence of just title. The
appellate court did not believe the findings of the trial court that Lot 2 was
acquired from Juan Valdez by purchase and Lot 3 was acquired also by
purchase from Egmidio Octaviano by petitioner Vicar because there was
absolutely no documentary evidence to support the same and the alleged
purchases were never mentioned in the application for registration.
Producers Bank of the Philippines vs CA (2003)

Doctrine:

Facts:

Vives (will be the creditor in this case) was asked by his friend Sanchez to
help thelatters friend, Doronilla (will be the debtor in this case) in
incorporating Doronillasbusiness Strela. This help basically involved
Vives depositing a certain amount of money in Strelas bank account for
purposes of incorporation (rationale: Doronilla had toshow that he had
sufficient funds for incorporation). This amount shall later be returnedto
Vives.

Relying on the assurances and representations of Sanchez and Doronilla,

Vives issued acheck of P200,00 in favor of Strela and deposited the same
into Strelas newly-openedbank account (the passbook was given to the
wife of Vives and the passbook had aninstruction that no
withdrawals/deposits will be allowed unless the passbook ispresented).

Later on, Vives learned that Strela was no longer holding office in the
address previouslygiven to him. He later found out that the funds had
already been withdrawn leaving onlya balance of P90,000. The Vives
spouses tried to withdraw the amount, but it wasunable to since the
balance had to answer for certain postdated checks issued byDoronilla.

Doronilla made various tenders of check in favor of Vives in order to pay

his debt. All of which were dishonored.

Hence, Vives filed an action for recovery of sum against Doronilla,

Sanchez, Dumagpiand Producers Bank.

TC & CA: ruled in favor of Vives.

Issue/s:

(1)WON the transaction is a commodatum or a mutuum.

COMMODATUM.

(2) WON the fact that there is an additional P 12,000 (allegedly representing
interest) inthe amount to be returned to Vives converts the transaction from
commodatum tomutuum. NO.

(3)WON Producers Bank is solidarily liable to Vives, considering that it

was not privy tothe transaction between Vives and Doronilla. YES.

Held/Ratio:

(1)The transaction is a commodatum.

CC 1933 (the provision distinguishing between the two kinds of loans)

seem to implythat if the subject of the contract is a consummable thing,
such as money, the contractwould be a mutuum. However, there are
instances when a commodatum may have forits object a consummable
thing. Such can be found in CC 1936 which states thatconsummable goods
may be the subject of commodatum if the purpose of the contractis not the
consumption of the object, as when it is merely for exhibition. In this
case,the intention of the parties was merely for exhibition. Vives agreed to
deposit his moneyin Strelas account specifically for purpose of making it
appear that Streal had sufficientcapitalization for incorporation, with the
promise that the amount should be returned

(2) CC 1935 states that the bailee in commodatum acquires the use of the
thing loaned but not its fruits. In this case, the additional P 12,000
corresponds to the fruits of the lending of the P 200,000.
(3) Atienza, the Branch Manager of Producers Bank, allowed the
withdrawals on the account of Strela despite the rule written in the
passbook that neither a deposit, nor a withdrawal will be permitted except
upon the production of the passbook (recall in this case that the passbook
was in the possession of the wife of Vives all along). Hence, this only
proves to show that Atienza allowed the withdrawals because he was party
to Doronillas scheme of defrauding Vives. By virtue of CC 2180, PNB, as
employer, is held primarily and solidarily liable for damages caused by
their employees acting within the scope of their assigned tasks. Atienzas
acts, in helpong Doronilla, a customer of the bank, were obviously done in
furtherance of the business of the bank, even though in the process, Atienza
violated some rules.