CASES (LOAN)

A. Republic of the Philippines v. Bagtas G.R. No. L-17474 2.

FACTS:

A case was filed raising questions of law on whether the contract was a
commodatum or lease. The action is arose when a contract of
agreement executed by the plaintiff and Bagtas which stated that the
latter may borrowed three bulls from the Bureau of Animal Industry for
breeding purpose subject to a breeding fee of 10% of the bull’s book
value.

Eventually, the contract was renewed for 1 bull only, and bagtas was
instructed to return the remaining bulls or 2 bulls, which he failed to do
so.

Consequently, the plaintiff filed a complaint before the CFI seeking the
return of the bulls or payment of their value. Thus, in 1952, Bagtas was
able to returned the two bulls but the third bull was allegedly killed
during a HUK Raid.

Hence, the plaintiff moved exparte for a writ of execution.

LOWER COURT:

The CFI granted the motion which the court issued a writ against the
surviving spouse of bagtas.

The latter objected alleging that the two bulls were returned, and the
third one was shot inflicted during a raid. However, the court denied
the same. Hence this appeal certified by the CA to this court.

ISSUE/S:
1. Whether or not the contract was a commodatum or lease.
(LEASE)

RULING OF SC:
THE CONTRACT WAS A LEASE. The Supreme Court held that
contract of commadatum 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 Civil Code which the provision provides
for 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.
 Supreme Court also emphasized that even if the contract be
considered as commodatum, still the defendant is still liable under
article 1942 of the Civil Code which provides that a bailee in a contract
of commodatum
* * * is liable for loss of the thing, 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 Court ruled that the trial court retained jurisdiction despite Bagtas'
death because his counsel failed to notify the court as required by
procedural rules. Hence, the judgment was modified, holding the
estate liable for P859.63 (value of the third bull) to be claimed in the
probate court, with no costs imposed. The writ of execution was set
aside, and the Republic was instructed to present its claim before the
probate court in the intestate proceedings.

B. Dario Nacar v. Gallery Frames G.R. No. 189871

FACTS:
A case for illegal dismissal was filed by the plaintiff which the Labor
Arbiter awarded him separation pay and backwages, but the amount of
award only covered the period up to the date of decision was made on
October 15, 1998.

Nacar contended that his backwages should be computed up to 2002

when the case was final, not just up to 1998 when the initial decision
was made. However, company argued that since the Labor Arbiter
already calculated the amount, no changes should be made on the
award.

ISSUES:
Whether or not backwages stop at the date of LA’s decision 1998 or
continue until the final decision.

RULING OF THE SC:

The court held that NACAR is entitled to recomputation since it was
necessary to account for the time between the LA’s decision and the
finality of the case. Likewise, it did not violate the rule that final
judgment cannot be changed – it simply ensured that NACAR received
the full amount owed to him under the law. In other words, re-
 computation was allowed because monetary award naturally increases
while the case is ongoing – especially when the delay is caused by the
employer’s appeals.

The recomputation of employee’s award is pursuant to Article 279

which states that backwages must be paid form the time of dismissal
until the final decision of the case. Hence, the defendant is liable to
pay the backwages from the date of dismissal with accrued 12% per
annum of the total amount from may 27, 2002 to June 30, 2013 and
6% per annum from July 1, 2013 until the full amount is paid.

The new rate could only be applied prospectively and not retroactively.
Consequently, the twelve percent (12%) per annum legal interest shall
apply only until June 30, 2013. Come July 1, 2013 the new rate of six
percent (6%) per annum shall be the prevailing rate of interest when
applicable.

BSP-MB Resolution No 796 May 16, 2013 (effective on 1 July 2013)–

approved amendment of legal interest for the loan or forbearance of
any money, goods or credits and the rate allowed in judgments, in the
absence of an express contract as to such rate of interest, shall be six
percent (6%) per annum.

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DEPOSIT

- A deposit is constuted from the moment a person receives a thing

belonging to another, with the obligation of safely keeping it and of
returning the same. If the safekeeping of the thing delivered is not the
principal purpose of the contract, there is no deposit but some other
contract.

Keyword: the principal purpose of the contract is for safekeeping

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Question:

Does the depositary has or have the right to use the property?
Or let say if it is given the right to use the property? Will it still be considered
a deposit?
- Yes, if the principal purpose is for safe keeping

If the depositary has the right to use will it be considered a deposit?

 - Yes, if the principal purpose is for safe keeping

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Example:
A car was actually deposited on the depository and there is a car show, and
the depository would say “Can I use the car you deposited in a Car show for
exhbition?”
- It can be done, because in this case the depository is permitted to
bring it to a car show but the principal purpose still of the contract is
for safekeeping

Car deposited, the car has to be use to preserve it basta ang pag gamit is
necessary for the preservation of the thing. It has to be used kay in order to
preserve it kay if you know the cars will discharge on battery if not used for
about 10 to 12 days. If not drive in months ma flat ang tires ana.

- even if not permitted to use the thing deposit, it is still considered a

deposit when the use of the thing is necessary for preservation of the
said thing deposited

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Take note:
Savings and current deposits
- Atty D. : we mentioned that these are not contract of deposit because
they are governed by the rules of simple loan, murag ang banko
nangutang nato.
- They are not considered irregular deposit because in the first place it is
not a contract of deposit but the supreme court would say are in the
nature of an irregular deposit because the bank has the right to use
the money that we deposited to them

In commodatum
- Atty D. : not liable sila the loss of the thing due to a fortuitous event
the same rule is true in deposit but there are exceptions under article
1979:
Art. 1979. The depositary is liable for the
loss of the thing through fortuitous event:
(1) if it so stipulated; (2) if he uses the thing
without depositor’s permission; (3) if he
delays its return; (4) if he allows others to
use it, even though he himself may have
been authorized to use the same
Permission to use not presumed
- GR: permission is not presumed
- EXP: when such use is necessary for the preservation of the thing
deposited

Burden to prove permission is granted

- Depositary has the burden to prove the same

Permission to use is granted exceptions

- GR: permission to use the thing deposited, the contract loses the
concept of deposit and becomes loan or commodatum
- EXP: where safekeeping is still the principal purpose of the contract

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IRREGULAR VS. MUTUUM

Subject Matter Irregular Mutuum
The consumable thing Lender is bound by the
deposited may be provisions of the
Consumable thing demanded at will contract and cannot
demandable at will seek restitution until
by depositor the time for payment,
as provided in the
contract, has arisen.
Only benefit is that Necessity of the
which accrues to the borrower; with a
Benefit accrues to
depositor stipulation to pay
depositor only
interest for the benefit
of both parties
Has preference over No preference in the
Depositor has
other creditors with distribution of the
preference over
respect to the thing debtor’s property
other creditors
deposited

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