1.) Credit Transactions Case Digest: Republic V.
Bagtas (1962)  December 1958: granted an ex-parte motion for the appointment of a
G.R. No. L-17474 October 25, 1962
Laws Applicable: Commodatum
FACTS:
 May 8, 1948: Jose V. Bagtas borrowed from the Republic of the
Philippines through the Bureau of Animal Industry three bulls: a Red
Sindhi with a book value of P1,176.46, a Bhagnari, of P1,320.56 and
a Sahiniwal, of P744.46, for a period of 1 year for breeding purposes
subject to a breeding fee of 10% of the book value of the bulls
 May 7, 1949: Jose requested for a renewal for another year for the
three bulls but only one bull was approved while the others are to be
returned
 March 25, 1950: He wrote to the Director of Animal Industry that he
would pay the value of the 3 bulls
 October 17, 1950: he reiterated his desire to buy them at a value with
a deduction of yearly depreciation to be approved by the Auditor
General.
 October 19, 1950: Director of Animal Industry advised him that
either the 3 bulls are to be returned or their book value without
deductions should be paid not later than October 31, 1950 which he
was not able to do
 December 20, 1950: An action at the CFI was commenced against
Jose praying that he be ordered to return the 3 bulls or to pay their
book value of P3,241.45 and the unpaid breeding fee of P199.62,
both with interests, and costs
 July 5, 1951: Jose V. Bagtas, through counsel Navarro, Rosete and
Manalo, answered that because of the bad peace and order situation
in Cagayan Valley, particularly in the barrio of Baggao, and of the
pending appeal he had taken to the Secretary of Agriculture and
Natural Resources and the President of the Philippines, he could not
return the animals nor pay their value and prayed for the dismissal of
the complaint.
 RTC: granted the action
special sheriff to serve the writ outside Manila
 December 6, 1958: Felicidad M. Bagtas, the surviving spouse of Jose
who died on October 23, 1951 and administratrix of his estate, was
notified
 January 7, 1959: she file a motion that the 2 bulls where returned by
his son on June 26, 1952 evidenced by recipt and the 3rd bull died
from gunshot wound inflicted during a Huk raid and prayed that the
writ of execution be quashed and that a writ of preliminary
injunction be issued.
ISSUE: W/N the contract is commodatum and NOT a lease and the estate
should be liable for the loss due to force majeure due to delay.
HELD: YES. writ of execution appealed from is set aside, without
pronouncement as to costs
 If contract was commodatum then Bureau of Animal
Industry retained ownership or title to the bull it should suffer its loss
due to force majeure. A contract of commodatum is essentially
gratuitous. If the breeding fee be considered a compensation, then
the contract would be a lease of the bull. Under article 1671 of the
Civil Code the lessee would be subject to the responsibilities of a
possessor in bad faith, because she had continued possession of the
bull after the expiry of the contract. And even if the contract be
commodatum, still the appellant is liable if he keeps it longer than
the period stipulated
 the estate of the late defendant is only liable for the sum of P859.63,
the value of the bull which has not been returned because it was
killed while in the custody of the administratrix of his estate
 Special proceedings for the administration and settlement of the
estate of the deceased Jose V. Bagtas having been instituted in the
CFI, the money judgment rendered in favor of the appellee cannot be
enforced by means of a writ of execution but must be presented to
the probate court for payment by the appellant, the administratrix
appointed by the court.
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2.)
Mina vs Pascual
Facts:
Francisco Fontanilla and Andres Fontanilla were brothers. Francisco
Fontanilla acquired duringhis lifetime, on March 12, 1874, a lot.Andres
Fontanilla, with the consent of his brother Francisco, erected a warehouse on
a part of the said lot,embracing 14 meters of its frontage by 11 meters of its
depth.Francisco Fontanilla, the former owner of the lot, being dead, the
herein plaintiffs, Alejandro Mina, et al.,were recognized without discussion
as his heirs.Andres Fontanilla, the former owner of the warehouse, also
having died, the children of Ruperta Pascualwere recognized, though it is not
said how, and consequently are entitled to the said building, or rather,
asRuperta Pascual herself stated, to only six-sevenths of
one-half
of it, the other half belonging, as itappears, to the plaintiffs themselves, and
the remaining one-seventh of the first one-half to the children ofone of the
plaintiffs, Elena de Villanueva.
Ruperta Pascual, as the guardian of her minor children, the herein
defendants, petitioned the Curt ofFirst Instance of Ilocos Norte
for authorization to sell "the six-sevenths of the
that the parties thereto agree to givethem, but must be construed, duly
considering their constitutive elements, as they are defined anddenominated
by law.By the contract of loan, one of the parties delivers to the other, either
anything not perishable, in orderthat the latter may use it during the
certain period
and return it to the former, in which case it is called
commodatum
It is, therefore, an essential feature of the commodatum that the use of
the thing belonging toanother shall BE for a certain period.
Francisco Fontanilla did not fix any definite period or time duringwhich
Andres Fontanilla could have the use of the lot whereon the latter was to
erect a stonewarehouse of considerable value, and so it is that for the past
thirty years of the lot has been used byboth Andres and his successors in
interest.
It would seem that the Supreme Court failed to consider the possibility of a
contract of precardiumbetween Francisco and Andres. Precardium is a kind
of commodatum wherein the bailor may demandthe object at will if the
contract does not stipulate a period or use to which the thing is devoted.

one-half

of the warehouse,of 14 by 11 meters, together with

its

lot.The warehouse, together with the lot on which it stands, was sold to Cu
Joco, the other defendant inthis case

Issue: WoN

there exist a contract of commodatum

Held:

although both litigating parties may have agreed in their idea of the
commodatum, on account ofits not being, as indeed it is not, a question of
fact but of lawContracts are not to be interpreted in conformity with the name

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3.) Credit - 6Producers Bank of the Philippines vs CA (2003) Held/Ratio:

Doctrine: (1)The transaction is a commodatum.

Facts:
Vives (will be the creditor in this case) was asked by his friend Sanchez to
help thelatter’s friend, Doronilla (will be the debtor in this case) in
incorporating Doronilla’sbusiness “Strela”. This “help” basically involved
Vives depositing a certain amount of money in Strela’s 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 Strela’s 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).
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 that“consummable 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
Strela’s account specifically for purpose of making it appear that Streal
had sufficientcapitalization for incorporation, with the promise that the
amount should be returned

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 Producer’s 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
Producer’s Bank is solidarily liable to Vives, considering that it was not
privy tothe transaction between Vives and Doronilla. YES.

3
4.) 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
tenant’s withholding of the property would then be unlawful.