Republic v.

CA
No. L-46145, 26 November 1986.
FACTS:
This case originally emanated from a decision of the then Court of First Instance of Zambales in
LRC Case No. 11-0, LRC Record No. N-29355, denying respondents' application for
registration. The Director of Lands opposed the registration of the said land owned by the Heirs
of Baloy alleging that this land had become public land thru the operation of Act 627 of the
Philippine Commission.
Under Act 627 as amended by Act 1138, a period was fixed within which persons affected
thereby could file their application, (that is within 6 months from July 8, 1905) otherwise "the
said lands or interests therein will be conclusively adjudged to be public lands and all claims on
the part of private individuals for such lands or interests therein not to presented will be forever
barred." Petitioner argues that since Domingo Baloy failed to file his claim within the prescribed
period, the land had become irrevocably public and could not be the subject of a valid
registration for private ownership.
ISSUES:
Whether the possessory rights of Baloy in the subject land were loss due to the
operation of Act 627.
HELD: NO
RATIO:
The finding of respondent court that during the interim of 57 years from November 26,1902 to
December 17, 1959 (when the U.S. Navy possessed the area) the possessory rights of Baloy or
heirs were merely suspended and not lost by prescription, is supported by Exhibit "U," a
communication or letter No. 1108-63, dated June 24, 1963, which contains an official statement
of the position of the Republic of the Philippines with regard to the status of the land in question.
Said letter recognizes the fact that Domingo Baloy and/or his heirs have been in continuous
possession of said land since 1894 as attested by an "Informacion Possessoria" Title, which
was granted by the Spanish Government. Hence, the disputed property is private land and this
possession was interrupted only by the occupation of the land by the U.S. Navy in 1945 for
recreational purposes. The U.S. Navy eventually abandoned the premises. The heirs of the late
Domingo P. Baloy, are now in actual possession, and this has been so since the abandonment
by the U.S. Navy. The U.S. Navy personnel are now using a new recreation area and this place
is remote from the land in question.

Clearly, the occupancy of the U.S. Navy was not in the concept of owner. It partakes of the
character of a commodatum. It cannot therefore militate against the title of Domingo Baloy and
his successors-in-interest. One's ownership of a thing may be lost by prescription by reason of
another's possession if such possession be under claim of ownership, not where the possession
is only intended to be transient, as in the case of the U.S. Navy's occupation of the land
concerned, in which case the owner is not divested of his title, although it cannot be exercised in
the meantime.
Producers Bank of the Philippines v. CA
GR No. 115324, 19 February 2003.
FACTS:
Private respondent Vives was approached by his friend, Angeles Sanchez to help one Col.
Arturo Doronilla in incorporating his business, Sterela Marketing and Services (Sterela) by
depositing money in its bank account. Vives issued a check in the amount of P200,000.00 in
favor of Sterela with the assurance that the same will be returned in a month.
Subsequently, upon learning that Sterela was no longer holding office in the address previously
given to him, Vives and his wife went to the bank and found out that only P90,000 remained in
the account. They were also informed that they could not withdraw said amount because it had
to answer for some post-dated checks issued by Doronilla. When Vives demanded Doronilla to
return his money, the latter issued three different checks, one after the other, for P212, 000.00,
all of which were dishonoured for insufficiency of funds.
Private respondent instituted an action for recovery of sum of money in the RTC of Pasig. The
RTC ruled in his favor and on appeal, the CA affirmed the decision of the RTC. Petitioner
elevated the case to the SC, contending that the transaction between Doronilla and Vives was
one of a simple loan and not accommodation as manifested by the additional P12, 000 in
payment for interest.
ISSUES:
Whether the transaction between Doronilla and Vives was one of a simple loan
HELD: NO
RATIO:
The transaction was a commodatum and not a mutuum. Article 1933 of the Civil Code seems to
imply that if the subject of the contract is a consumable thing, such as money, the contract

would be a mutuum. However, there are some instances where a commodatum may have for its
object a consumable thing.
Under Article 1936 of the Civil Code, if consumable goods are loaned only for the purposes of
exhibition, or when the intention of the parties is to lend the consumable goods and to have the
very same goods returned at the end of the period agreed upon, the loan is a commodatum and
not a mutuum. Here, Vives agreed to deposit his money in Sterelas savings account for the
purpose of making it appear that said firm had sufficient capitalization for incorporation with the
promise that the same will be returned in 30 days.
As to the additional P12,000, the same represents the fruits of the lending of P200,000. Article
1935 of the Civil Code expressly states that the bailee in commodatum acquires the use of the
thing loaned but not its fruits.

Pajuyo v. CA
GR No. 146364, 3 June 2004.
FACTS:
Petitioner Pajuyo paid P400 to a certain Pedro Perez for the rights a 250 square meter lot in
Barrio Payatas, Quezon City. Pajuyo then constructed a house made of light materials on the lot.
Pajuyo and private respondent Eddie Guevarra executed a Kasunduan or agreement. Pajuyo
allowed Guevarra to live in the house for free provided Guevarra would maintain the cleanliness
and orderliness of the house. Guevarra promised he would voluntarily vacate the premises on
Pajuyos demand. Pajuyo informed Guevarra of his need of the house and demanded that
Guevarra vacate the house. Guevarra refused. Pajuyo filed an ejectment case with the MTC to
which Guevarra claimed that Pajuyo had no valid title or right of possession over the lot where
the house stands because the lot is within the 150 hectares set aside by Proclamation No. 137
for socialized housing. MTC ruled in favor of Pajuyo since the subject of the agreement between
the two is the house and not the lot. Pajuyo is the owner of the house and he allowed Guevarra
to use the house only by tolerance. Guevarra appealed to RTC where it affirmed the MTC
decision. The RTC ruled that the Kasunduan bound Guevarra to return possession of the house
on demand. The RTC declared that in an ejectment case, the only issue for resolution is
material or physical possession, not ownership. The CA reversed the RTC decision stating that
both Pajuyo and Guevarra illegally occupied the contested lot, which the government owned.
Perez, the person from Pajuyo acquired his rights, was also a squatter and had no right over the
lot because it is public land. The Kasunduan between Pajuyo and Guevarra did not have any
legal effect. The CA ruled that the Kasunduan is not a lease contract but a commodatum
because the agreement is not for a price certain. The CA held that Guevarra has a better right

over the property under Proclamation No. 137 stating that the actual occupant or caretaker of
the lot shall have first priority as beneficiary of the project. Pajuyo filed for a motion for
reconsideration. Hence, this appeal.
ISSUES:
Whether or not the contractual relationship between Pajuyo and Guevarra was that of a
commodatum.
HELD: NO
RATIO:
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
Even assuming that the relationship between Pajuyo and Guevarra is one of commodatum,
Guevarra as baileewould still have the duty to turn over possession of the property to Pajuyo,
the bailor. The obligation to deliveror to return the thing received attaches to contracts for
safekeeping, or contracts of commission, administration and commodatum. These contracts
certainly involve the obligation to deliver or return thething received.
Guevarra turned his back on the Kasunduan on the sole ground that, like him, Pajuyo is also a
squatter. Guevarra should know that there must be honor even between squatters. Guevarra
freely entered into the Kasunduan. Guevarra cannot now impugn the Kasunduan after he had
benefited from it. The Kasunduan binds Guevarra.

Catholic Vicar Apostolic of the Mt. Province v. CA

Nos. L-80294-95, 21 September 1988.
FACTS:
The Catholic Vicar Apostolic of Mountain Province (Vicar) filed with the Court of First Instance in
Benguet an application for registration of titles over Lots 1,2,3, and 4 in La Trinidad Benguet.
Catholic buildings, convents, school structures were built over the said properties. The Heirs of
Juan Valdez and Heirs of Egmedio Octaviano filed their opposition on Lots 2 and 3 respectively

asserting ownership over the same. The CFI ruled in favor of the Vicar, confirming the
registerable title of the Vicar over the four lots. Upon appeal, the Court of Appeals reversed the
decision of the land registration court and dismissed the Vicars registration to Lots 2 and 3.
Subsequently, the Heirs of Ocatviano filed a motion for reconsideration with the CA praying that
Lot 3 be registered under their name. The Heirs of Valdez also sought the same action from the
CA for Lot 2 and 3. After unsuccessful appeals with the CA, the Heirs of Valdez filed a petition
for review of certiorari with the SC, which was subsequently denied for lack of merit. Upon
finality of the SC decision, the Heirs of Octaviano filed with the CFI in Baguio a motion for
execution of judgement praying that Lot 3 be placed under their possession of Lot 3. The CFI
dismissed the petition on the ground of the previous CA decision denying the petition for
affirmative relief. The Heirs of Valdez and Heirs of Octaviano filed the instant petition.
ISSUES:
Whether the petitioners can raise the issue of ownership because the CA decision merely
dismissed their application for registration?
HELD: NO
RATIO:
The CA decision did not positively declare the private respondents as owners of the land,
neither did it declare that they were not the owners of the property. Findings of the trial court
established the fact that the Vicar was a bailee in a commodatum, with the private respondents
as bailors. Petitioner borrowed private respondents properties. The bailees failure to return the
subject matter of the commodatum did not mean adverse possession on the part of the
borrower. The adverse claim came when the bailee when it declared the lots for the purpose of
taxation. The action of petitioner Vicar by such adverse claim could not ripen into title by way of
ordinary acquisitive prescription because the absence of a just title.

Quintos v. Beck

No. 46240, 3 November 1939.

FACTS:
Beck was a tenant of Quintos. The plaintiff granted the defendant use of furniture subject to the
condition that the latter would return them to the former upon his demand.
Subsequently, Quintos sold the property to one Maria and Rosario Lopez. Beck was notified and
asked to vacate the premises within sixty days. He was also required to return all the furniture
transferred to him for use. The defendant however wrote to the plaintiff that he could not give up
3 gas heaters and 4 electric lamps because he will use them until the lease is due to expire.
Quintos refused to get the furniture in view of the fact that Beck declined to deliver all of them.
Before vacating the house, defendant deposited with the Sheriff all of Quintos furniture.
ISSUES:
Whether the defendant complied with his obligation to return the furniture upon demand
HELD: NO

RATIO:
The contract entered into between the parties is one of commodatum because under it the
plaintiff gratuitously granted the use of the furniture to the defendant, reserving for herself the
ownership thereof; by this contract the defendant bound himself to return the furniture upon
demand.
The obligation voluntarily assumed by the defendant to return the furniture upon demand,
means that he should return all of them to the plaintiff at the latters residence. Beck breached
the contract of commodatum and it is just and equitable that he pays the legal expenses and
other judicial costs which the plaintiff would not have otherwise defrayed.