REPUBLIC OF THE PHILIPPINES v. JOSE V.

BAGTAS
G.R. No. L-46240, November 3, 1939, Imperial, J.

A contract of commodatum is essentially gratuitous. A breeding fee can be considered as a compensation

rendering the contract to lose its gratuitous character and become a contract of lease.

Facts:
Jose V. Bagtas borrrowed three bulls from the Republic of the Philippines through the Bureau of Animal
industry for a period of one year for breeding. The government charged 10% of their book value as breeding
fee. When the contract expired, Bagtas asked for the agreement’s renewal. The Secretary of Agriculture and
Natural Resources approved the renewal of only one bull for another year and asked for the other two to be
returned. Bagtas then wrote to the Director of Animal Industry that he would pay the value for three bulls. He
even reiterated his desire to buy them but asked for a reduced price. The Director of Animal Industry advised
him that the reduction could not be done.
Consequently, Bagtas failed to pay the book value of the three bulls or return them thus the Republic of
the Philippines commenced an action against him with the Court of First Instance for specific performance. The
CFI ruled in favor of the Republic. When Jose died his surviving spouse Felicidad continued the case. She filed
a motion alleging that two of the bulls were already returned while the third bull died from a gunshot wound
inflicted by a Huk raid. She prayed for injunction and the quashal of the writ of execution.

Issue: Whether or not Bagtas is liable for the loss of the bull.

Ruling:
YES. Bagtas is liable for the loss of the bull because the contract ceased to be a commodatum. 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 even after the
expiry of the contract. Even granting that the contract is commodatum, still the appellant is liable, because
Article 1942 of the Civil Code provides that a bailee in a contract of commodatum —

. . . is liable for loss of the things, even if it should be through a fortuitous event:
(2) If he keeps it longer than the period stipulated . . .
(3) If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation exempting
the bailee from responsibility in case of a fortuitous event;

The original period of the loan was from 8 May 1948 to 7 May 1949. The loan of one bull was renewed
for another period of one year to end on 8 May 1950 but the appellant kept and used the bull until November
1953 when during a Huk raid it was killed by stray bullets. Furthermore, when lent and delivered to Jose, the
bulls had each an appraised book value, to wit: the Sindhi, at P1,176.46, the Bhagnari at P1,320.56 and the
Sahiniwal at P744.46. Also, there was no stipulation that in case of loss of the bull due to fortuitous event Jose
would be exempt from liability.