Article 1170.

Those who in the performance of their

DE LOS SANTOS VS JARRA obligations are guilty of fraud, negligence, or delay, and those
G.R. No. L-4150 February 10, 1910 who in any manner contravene the tenor thereof, are liable for
damages

FACTS:
The carabaos delivered to be used not being returned by the
Delos Santos alleged that Jimenea borrowed and obtained from defendant upon demand, there is no doubt that she is under
him ten first-class carabaos. It will be used at the animal-power obligation to indemnify the owner thereof by paying him their
mill of Jimenea’s hacienda without recompense or value.
remuneration whatsoever but under the sole condition that they
should be returned to the owner as soon as the work at the mill The obligation of the bailee or of his successors to return either
was terminated. However, Jimenea did not return the carabaos the thing loaned or its value is sustained by the Supreme
despite the demands of Delos Santos. tribunal of Spain. In its decision of March 21, 1895, it sets out
with precision the legal doctrine touching commodatum as
Since Jimenea was already dead, Delos Santos brought the follows:
action against Agustina Jarra, the administratrix of the estate of
Jimenea. Although it is true that in a contract of commodatum the bailor
retains the ownership of the thing loaned, and at the expiration
of the period, or after the use for which it was loaned has been
Jarra admitted that Jimenea asked Delos Santos to loan him ten
accomplished, it is the imperative duty of the bailee to return
carabaos, but he only obtained three second-class animals,
the thing itself to its owner, or to pay him damages if through
which were later on sold to Jimenea.
the fault of the bailee the thing should have been lost or
injured, it is clear that where public securities are involved,
The trial court ordered Agustina Jarra, as administratrix of the
the trial court, in deferring to the claim of the bailor that the
estate of Jimenea, to return to Delos Santos the remaining six-
amount loaned be returned him by the bailee in bonds of the
second and third class carabaos, or the value thereof at the rate
same class as those which constituted the contract, thereby
of P120 each, or a total of P720 with the costs.
properly applies law 9 of title 11 of partida 5.
(From the foregoing it may be logically inferred that the
When Delos Santos demanded for the return of the carabaos to
carabaos loaned or given on commodatum to the now
him, Jimenea or Jarra had the obligation to do so. However,
deceased Magdaleno Jimenea were ten in number; that they,
since the object of the commodatum itself CANNOT BE
or at any trae the six surviving ones, have not been returned to
RETURNED because only six carabaos were left, Jarra is
the owner thereof, Felix de los Santos, and that it is not true
under obligation to indemnify the owner thereof by
that the latter sold to the former three carabaos that the
purchaser was already using; therefore, as the said six Q. Was there commodatum?
carabaos were not the property of the deceased nor of any of A. Yes, there was commodatum.
his descendants, it is the duty of the administratrix of the estate Q. The death was due to rinderpest, right? It was a
to return them or indemnify the owner for their value.) fortuitous event. Why is there still a liability?
A. The carabaos were not returned within the stipulated
period.
ISSUE: W/N the transaction between Delos Santos and
Jimenea was a commodatum. YES IT WAS A CONTRACT Discussion:
OF COMMODATUM So, in this case, in relation to 1942 (2), there was already a
demand. However, the carabaos were not immediately
RULING: returned. Hence, there is delay. And when there is delay,
there is still liability even though there is fortuitous event.
Article 1933. By the contract of loan, one of the parties
delivers to another, either something not consumable so that This is in relation to Article 1170 of the Civil Code.
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.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay

interest.

In commodatum the bailor retains the ownership of the thing

loaned, while in simple loan, ownership passes to the borrower.

Article 1942. The bailee is liable for the loss of the thing,

even if it should be through a fortuitous event:

(1) If he devotes the thing to any purpose different from that

for which it has been loaned;
(2) If he keeps it longer than the period stipulated, or
after the accomplishment of the use for which the
commodatum has been constituted;
(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;
(4) If he lends or leases the thing to a third person, who is not
a member of his household;
(5) If, being able to save either the thing borrowed or his own
thing, he chose to save the latter. (1744a and 1745)
 CATHOLIC VICAR VS CA
G.R. No. 802904 September 21, 1988 2. No. The bailees’ failure to return the subject matter of
commodatum to the bailor DID NOT MEAN ADVERSE
FACTS: POSSESSION ON THE PART OF THE BORROWER.
in 1962, Catholic Vicar Apostolic of the Mountain Province The bailee held in trust the property subject matter of
(Vicar), petitioner, filed with the court an application for the commodatum.
registration of title over LOTS 1, 2, 3 AND 4 situated in
Poblacion Central, Benguet, said lots being used as sites of the Petitioner repudiated the trust by declaring the properties in its
Catholic Church, building, convents, high school building, name for taxation purposes.
school gymnasium, dormitories, social hall and stonewalls.
Ratio: The Court of Appeals found that petitioner Vicar did not
In 1963, Heirs of Juan Valdez and Heirs of Egmidio Octaviano meet the requirement of 30 years possession for acquisitive
claimed that they have ownership over lots 1, 2 and 3. (2 prescription over Lots 2 and 3. Neither did it satisfy the
separate civil cases In 1965, The LAND REGISTRATION requirement of 10 years possession for ordinary acquisitive
COURT CONFIRMED the registrable title of Vicar to lots 1 , prescription because of the absence of just title. The appellate
2, 3 and 4. court did not believe the findings of the trial court that Lot 2
was acquired from Juan Valdez by purchase and Lot 3 was
Upon appeal by the private respondents (heirs), the decision of acquired also by purchase from Egmidio Octaviano by
the lower court was REVERSED. TITLE FOR LOTS 2 AND petitioner Vicar because there was absolutely no documentary
3 WERE CANCELLED. evidence to support the same and the alleged purchases were
never mentioned in the application for registration.
VICAR filed with the Supreme Court a petition for review on
certiorari of the decision of the Court of Appeals dismissing his RULING UPON MOTION FOR RECONSIDERATION:
application for REGISTRATION OF LOTS 2 AND 3. UPON THE MOTION FOR RECONSIDERATION DATED
MARCH 23, 1990 (GR: 80294-95) COURT REVERSED ITS
DECISION
During trial, the Heirs of Octaviano presented one (1) witness, From the foregoing, it appears that the petitioner was in
who testified on the alleged ownership of the land in question possession of the said property as borrower in commodatum
(Lot 3) by their predecessor-in-interest, Egmidio Octaviano; his from private respondents since 1906 but in 1951 petitioner
written demand to Vicar for the return of the land to them; and repudiated the trust when it name. When it filed its application
the reasonable rentals for the use of the land at P10,000 per for registration of the said property in 1962, petitioner had been
month. in adverse possession of the same for at least 11 years
Article 555 of the Civil Code provides as follows:
On the other hand, Vicar presented the Register of Deeds for
the Province of Benguet, Atty. Sison, who testified that the "Art. 555. A possessor may lose his possession:
land in question is not covered by any title in the name of (1) By the abandonment of the thing;
Egmidio Octaviano or any of the heirs. Vicar dispensed with (2) By an assignment made to another either by onerous or
the testimony of Mons. Brasseur when the heirs admitted that gratuitous title;
the witness if called to the witness stand, would testify that (3) By the destruction or total loss of the thing or because it
Vicar has been in possession of Lot 3, for 75 years goes out of commerce;
continuously and peacefully and has constructed permanent (4) By the possession of another, subject to the provisions of
structures thereon. Article 537, if the new possession has lasted longer than one
year. But the real right of possession is not lost till after the
ISSUES: lapse of ten years. (460a)" (Underscoring supplied.)
1. WON Vicar had been in possession of lots 2 and 3 merely as From the foregoing provision of the law, particularly paragraph
bailee borrower in commodatum, a gratuitous loan for use. 4 thereof, it is clear that the real right of possession of private
COMMODATUM respondents over the property was lost or no longer exists
2. Whether or not the failure to return the subject matter of after the lapse of 10 years that petitioner had been in adverse
commodatum constitutes an adverse possession on the part of possession thereof.
the owner NO
Thus, the action for recovery of possession of said property
RULING: filed by private respondents against petitioner MUST FAIL.
1. Private respondents (HEIRS OF EGMIDIO OCTAVIANO The Court, therefore, finds that the trial court and the Court of
AND JUAN VALDEZ) were able to prove that their Appeals erred in declaring the private respondents to be
predecessors' house was borrowed by petitioner Vicar after the entitled to the possession thereof. Much less can they pretend
church and the convent were destroyed. They never asked for to be owners thereof. Said lots are part of the public domain.
the return of the house, but when they allowed its free use, (Since, na abandon na man daw)
they became bailors in commodatum and the petitioner the
bailee.
Q: Was there actually an adverse possession by
From the foregoing, it appears that the petitioner was in virtue of possession in commodatum
possession of the said property as borrower in commodatum A: No.
from private respondents since 1906 but in 1951 petitioner Q: Why was the ownership repudiated?
repudiated the trust WHEN IT DECLARED THE A: in 1951, petitioner declared the property for tax
PROPERTY FOR TAX PURPOSES UNDER ITS NAME. purposes under its name
When it filed its application for registration of the said property Q: What is the nature of the possession of a bailee in
in 1962, petitioner had been in adverse possession of the same a commodatum?
for at least 11 years. A: IN TRUST. In a commodatum, the bailee is
actually possessing the property in trust for the bailor
because the property was lent to you with the
condition to return it after a period of time. If there The contract entered into between the parties is one
are extraordinary expenses that will incurred as a of commadatum, because under it the plaintiff gratuitously
result of the ordinary use, that will be 50:50. granted the use of the furniture to the defendant, reserving for
herself the ownership thereof; by this contract the defendant
So in this case, you cannot really say that when the bound himself to return the furniture to the plaintiff, upon the
bailee was in possession of the property in the latters demand (clause 7 of the contract, Exhibit A; articles
concept of a bailee in a commodatum, there was 1740, paragraph 1, and 1741 of the Civil Code).
adverse possession that will be counted in favor of
prescriptive period such as 10 years or 30 years. It
The obligation voluntarily assumed by the defendant to return
was also discussed in this case that there was no just
the furniture upon the plaintiff's demand, means that he should
title to speak of because youre only putting the
return all of them to the plaintiff at the latter's residence or
property in trust as a bailee in commodatum.
house
There was only repudiation of the trust or an
assertion that “I am already the owner of this ISSUE #2
property, for tax purposes” but you were in the
possession of the property as a bailee, there can be
no adverse possession. (Catholic Vicar Apostolic of
2. The obligation voluntarily assumed by Beck to return the
the Mt. Province v CA)
furniture upon Quintos demand means that he should return all
of them to Quintos at the her residence or house.

Beck did not comply with this obligation when he merely

placed them at the disposal of Quintos, retaining for his benefit
QUINTOS VS BECK the three gas heaters and the four electric lamps.
G.R. No. 46240 November 3, 1939

FACTS: Since Beck had voluntarily undertaken to return all the

Beck occupied the house of Quintos as tenant. Upon the furniture to Quintos, upon the latter's demand, the Court could
novation of the contract of lease, Quintos GRATUITOUSLY not legally compel her to bear the expenses occasioned by the
GRANTED Beck the use of the furniture subject to the deposit of the furniture at Beck’s behest. Beck, as bailee, was
condition that Beck would return them to Quintos upon her not entitled to place the furniture on deposit; nor was Quintos
demand. under a duty to accept the offer to return the furniture, because
Beck wanted to retain the three gas heaters and the four electric
Later on, Quintos sold the house and demanded from Beck the lamps.
return of the furniture. However, Beck wrote a letter to Quintos
saying that he could not give up the three gas heaters and the As to the value of the furniture, we do not believe that Quintos
four electric lamps because he would still use them until the is entitled to the payment thereof by Beck in case of his
expiration of contract of lease. inability to return some of the furniture because under
paragraph 6 of the stipulation of facts, Beck has neither agreed
Later on, before vacating the house, Beck deposited with the to nor admitted the correctness of the said value.
Sheriff all the furniture belonging to Quintos. The furniture
was then placed in a warehouse in the custody of the sheriff.
Should Beck fail to deliver some of the furniture, the value
The trial court ruled that Quintos failed to comply with her thereof should be later determined by the trial court through the
obligation to get the furniture when they were offered to her. evidence which the parties may desire to present.
Hence, she must bear the consequence and the expenses
thereof. The costs in both instances should be borne by Beck because
Quintos is the prevailing party. Beck was the one who breached
ISSUES: the contract of commodatum, and without any reason he
(1) W/N the contract between the parties was a commodatum. refused to return and deliver all the furniture upon Quinto’s
YES demand. In these circumstances, it is just and equitable that he
(2) W/N Beck complied with his obligation to return the pay the legal expenses and other judicial costs which Quintos
furniture to Quintos. NO would not have otherwise defrayed.

RULING:
ISSUE #1 Q. What contract was present in this case?
Article 1933. By the contract of loan, one of the parties A. Contract of Commodatum. More specifically, a
delivers to another, either something not consumable so that precarium.
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 Q. What about the contention that there was an offer to
amount of the same kind and quality shall be paid, in which
case the contract is simply called a loan or mutuum.
return some of the furnitures?
A. It is not allowable to deliver, or return, the thing
Commodatum is essentially gratuitous. partially.
Simple loan may be gratuitous or with a stipulation to pay
interest. Discussion:
In commodatum the bailor retains the ownership of the thing
loaned, while in simple loan, ownership passes to the borrower. In this case, aside from the fact that it shows what a
precarium is, it provides for the principle that when you
have the right to receive a thing, one is not required to
 that the latter may use the same for a certain time and
return it, in which case the contract is called
accept it partially. In Oblicon, one can deny the a commodatum; or money or other consumable thing,
performance of an obligation if it is only partial. 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.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to
pay interest.
YONG CHAN KIM VS PEOPLE In commodatum the bailor retains the ownership of the
G.R. No. 84719 January 25, 1991 thing loaned, while in simple loan, ownership passes to
the borrower.

FACTS: Art. 1953.— A person who receives a loan of money or

Petitioner Yong Chan Kim was issued Travel Order which any other fungible thing acquires the ownership thereof,
covered his travels to different places in Luzon from 16 June to and is bound to pay to the creditor an equal amount of
21 July 1982, a period of thirty five (35) days. Under this travel the same kind and quality.
order, he received P6,438.00 as cash advance to defray his
travel expenses. Since ownership of the money (cash advance) was transferred
to petitioner, NO FIDUCIARY RELATIONSHIP WAS
Within the same period, petitioner was issued another travel CREATED. Absent this fiduciary relationship between
order, requiring him to travel from the Head Station at petitioner and private respondent, which is an essential element
Tigbauan, Iloilo to Roxas City from 30 June to 4 July 1982, a of the crime of estafa by misappropriation or conversion,
period of five (5) days. For this travel order, petitioner received petitioner could not have committed estafa.
a cash advance of P495.00.
Additionally, it has been the policy of private respondent that
On 14 January 1983, petitioner presented both travel orders for
all cash advances not liquidated are to be deducted
liquidation, submitting Travel Expense Reports to the
correspondingly from the salary of the employee concerned.
Accounting Section. When the Travel Expense Reports were
The evidence shows that the corresponding salary deduction
audited, it was discovered that there was an overlap of four (4)
was made in the case of petitioner vis-a-vis  the cash advance
days (30 June to 3 July 1982) in the two (2) travel orders for
in question.
which petitioner collected per diems twice.

In September 1983, two (2) complaints for Estafa were filed In this case: In estafa, you’re given something and
against the petitioner before the Municipal Circuit Trial Court you’re not allowed to use it all, as you do not come
at Guimbal, Iloilo, docketed as Criminal Case Nos. 628 and into ownership of the object. There is trust and
631. confidence involved. One important element of estafa
is deceit; there is abuse of confidence. Hence, in
estafa one is not allowed to use the object at all
ISSUE:
unless authorized to do so. However, in loan, the
WON Yong Chan Kim was liable for estafa. NO
ownership is transferred. With that, use of the object
is allowed as long as at the end of the period, you
RULING:
pay something of the same kind and quality.
Remember this case.
In order that a person can be convicted with Estafa, IT MUST
BE PROVEN THAT HE HAD THE OBLIGATION TO
DELIVER OR RETURN THE SAME MONEY, GOOD
OR PERSONAL PROPERTY THAT HE HAD
RECEIVED.

Liquidation simply means the settling of an indebtedness. An

employee, such as herein petitioner, who liquidates a cash
advance is in fact paying back his debt IN THE FORM OF A
LOAN of money advanced to him by his employer, as  per
diems and allowances.

Similarly, as stated in the assailed decision of the lower court,

"if the amount of the cash advance he received is less than the
amount he spent for actual travel . . . he has the right to demand
reimbursement from his employer the amount he spent coming
from his personal funds. Inother words, the money advanced by
either party is actually a loan to the other. Hence, petitioner
was under no legal obligation to return the same cash or
money,  i.e., the bills or coins, which he received from the
private respondent

Article 1933 and Article 1953 of the Civil Code define the
nature of a simple loan.

Art. 1933. By the contract of loan, one of the parties

delivers to another, either something not consumable so