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CATHOLIC VICAR APOSTOLIC v. CAG.R. No. L-80294-95 September 21, 1988

Gancayco, J.

Doctrine:The bailees' failure to return the subject matter of commodatum to the bailor does not mean adverse possession on thepart of the borrower. The bailee held in trust the property subject matter of commodatum.

Claims of Vicar and heirs of valdez

- 1962: Catholic Vicar Apostolic of the Mountain Province (Vicar), petitioner, filed with the court an application for theregistration of title over lots 1, 2, 3 and 4 situated in Poblacion Central, Benguet, said lots being used as sites of theCatholic Church, building, convents, high school building, school gymnasium, dormitories, social hall and stonewalls.- 1963: Heirs of Juan Valdez and Heirs of Egmidio Octaviano claimed that they have ownership over lots 1, 2 and 3. (2separate civil cases)- 1965: The land registration court confirmed the registrable title of Vicar to lots 1 , 2, 3 and 4. Upon appeal by the privaterespondents (heirs), the decision of the lower court was reversed. Title for lots 2 and 3 were cancelled.- VICAR filed with the Supreme Court a petition for review on certiorari of the decision of the Court of Appeals dismissinghis application for registration of Lots 2 and 3.- During trial, the Heirs of Octaviano presented one (1) witness, who testified on the alleged ownership of the land inquestion (Lot 3) by their predecessor-in-interest, Egmidio Octaviano; his written demand to Vicar for the return of the landto them; and the reasonable rentals for the use of the land at P10,000 per month. On the other hand, Vicar presented theRegister of Deeds for the Province of Benguet, Atty. Sison, who testified that the land in question is not covered by any

title in the name of Egmidio Octaviano or any of the heirs. Vicar dispensed with the testimony of Mons. Brasseur when theheirs admitted that the witness if called to the witness stand, would testify that Vicar has been in possession of Lot 3, for75 years continuously and peacefully and has constructed permanent structures thereon.

Issue: WON Vicar had been in possession of lots 2 and 3 merely as bailee borrower in commodatum, a gratuitous loan foruse.

Held: YES.

Private respondents were able to prove that their predecessors' house was borrowed by petitioner Vicar after the churchand the convent were destroyed. They never asked for the return of the house, but when they allowed its free use, theybecame bailors in commodatum and the petitioner the bailee.

The bailees' failure to return the subject matter of commodatum to the bailor did not mean adverse possession on the partof the borrower. The bailee held in trust the property subject matter of commodatum. The adverse claim of petitioner cameonly in 1951 when it declared the lots for taxation purposes. The action of petitioner Vicar by such adverse claim could notripen into title by way of ordinary acquisitive prescription because of the absence of just title.

The Court of Appeals found that petitioner Vicar did not meet the requirement of 30 years possession for acquisitiveprescription over Lots 2 and 3. Neither did it satisfy the requirement of 10 years possession for ordinary acquisitiveprescription because of the absence of just title. The appellate court did not believe the findings of the trial court that Lot 2was acquired from Juan Valdez by purchase and Lot 3 was acquired also by purchase from Egmidio Octaviano bypetitioner Vicar because there was absolutely no documentary evidence to support the same and the alleged purchaseswere never mentioned in the application for registration.

Republic of the Philippines vs. Jose Bagtas, Felicidad Bagtas, administratrix of the intestateestate left by JoseBagtas

Claims:

Bagtas borrowed three bulls from the Bureau of Animal Industry for a period of one year with breeding charge at 10% ofbook value. After one year, the contract was renewed only for one bull but Bagtas did not return the two, one of whichdied because of gunshot wound during the Huk raid.

Jose Bagtas borrowed from the Bureau of Animal Industry three bulls for a period of one year for breedingpurposes subject to a government charge of breeding fee of 10% of the book value of the books.

Upon the expiration of the contract, Bagtas asked for a renewal for another one year, however, the Secretary ofAgriculture and Natural Resources approved only the renewal for one bull and other two bulls be returned.

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Bagtas then wrote a letter to the Director of Animal Industry that he would pay the value of the three bulls with adeduction of yearly depreciation. The Director advised him that the value cannot be depreciated and askedBagtas to either return the bulls or pay their book value.

Bagtas neither paid nor returned the bulls.

Claims REPUBLIC:

The Republic then commenced an action against Bagtas ordering him to return the bulls or pay their book value.

After hearing, the trial Court ruled in favor of the Republic, as such, the Republic moved ex parte for a writ ofexecution which the court granted.

Felicidad Bagtas, the surviving spouse and administrator of Bagtas estate, returned the two bulls and filed amotion to quash the writ of execution since one bull cannot be returned for it was killed by gunshot during a Hukraid. The Court denied her motion hence, this appeal certified by the Court of Appeals because only questions oflaw are raised.

Issue: Is Bagtas liable for the loss of the bull?

Held: Supreme Court held that Bagtas was liable for the loss of the bull even though it was caused by a fortuitous event. Ifthe contract was one of lease, then the 10% breeding charge is compensation (rent) for the use of the bull and Bagtas, aslessee, is subject to the responsibilities of a possessor. He is also in bad faith because he continued to possess the bulleven though the term of the contract has already expired. If the contract was one of commodatum, he is still liable

because: (1) he kept the bull longer than the period stipulated; and (2) the thing loaned has been delivered with appraisalof its value (10%).

A contract of commodatum is essentially gratuitous. Supreme Court held that Bagtas was liable for the loss of thebull even though it was caused by a fortuitous event.

If the contract was one of lease, then the 10% breeding charge is compensation (rent) for the use of the bull andBagtas, as lessee, is subject to the responsibilities of a possessor. He is also in bad faith because he continued topossess the bull even though the term of the contract has already expired.

If the contract was one of commodatum, he is still liable because: (1) he kept the bull longer than the periodstipulated; and (2) the thing loaned has been delivered with appraisal of its value (10%). No stipulation that incase of loss of the bull due to fortuitous event the late husband of the appellant would be exempt from liability.

The original period of the loan was from 8 May 1948 to 7 May 1949. The loan of one bull was renewed for anotherperiod of one year to end on 8 May 1950. But the appellant kept and used the bull until November 1953 whenduring a Huk raid it was killed by stray bullets.

Furthermore, when lent and delivered to the deceased husband of the appellant the bulls had each an appraisedbook value, to with: the Sindhi, at P1,176.46, the Bhagnari at P1,320.56 and the Sahiniwal at P744.46. It was notstipulated that in case of loss of the bull due to fortuitous event the late husband of the appellant would be exemptfrom liability.

MINA V. PASCUAL

Facts: Francisco Fontanilla and Andres Fontanilla were brothers. Francisco Fontanilla acquired during his lifetime, onMarch 12, 1874, a lot in the center of the town of Laoag, the capital of the Province of Ilocos Norte, the property havingbeen awarded to him through its purchase at a public auction held by the alcalde mayor of that province. AndresFontanilla, with the consent of his brother Francisco, erected a warehouse on a part of the said lot, embracing 14 meters

of its frontage by 11meters 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 thewarehouse, also having died, the children of Ruperta Pascual were recognized likes without discussion, though it is notsaid how, and consequently are entitled to the said building, or rather, as Ruperta Pascual herself stated, to only six-sevenths of one-half of it, the other half belonging, as it appears, to the plaintiffs themselves, and the remaining one-seventh of the first one-half to the children of oneof the plaintiffs, Elena de Villanueva. The fact is that the plaintiffs and thedefendants are virtually, to all appearance, the owners of the warehouse; while the plaintiffs are undoubtedly, the ownersof the part of the lot occupied by that building, as well as of the remainder thereof. This was the state of affairs, when, onMay 6, 1909, Ruperta Pascual, as the guardian of her minor children, the herein defendants, petitioned the Court of FirstInstance of Ilocos Norte for authorization to sell "the six-sevenths of the one-half of the warehouse, of 14 by 11 meters,together with its lot." The plaintiffs - that is Alejandra Mina, et al. - opposed the petition of Ruperta Pascual for the reasonthat the latter had included therein the lot occupied by the warehouse, which they claimed was their exclusive property. Allthis action was taken in a special proceeding in reguardianship. The plaintiffs did more than oppose Pascual's petition;

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they requested the court, through motion, to decide the question of the ownership of the lot before it pass upon thepetition for the sale of the warehouse. But the court before determining the matter of the ownership of the lot occupied bythe warehouse, ordered the sale of this building So, the warehouse, together with the lot on which it stands, was sold toCu Joco, the other defendant in this case.

MINa: opposed the petition of Ruperta Pascual for the reason that the latter had included therein the lot occupied by thewarehouse, which they claimed was their exclusive property. All this action was taken in a special proceeding inreguardianship. The plaintiffs did more than oppose Pascual's petition; they requested the court, through motion, todecide the question of the ownership of the lotbefore it pass upon the petition for the sale of the warehouse.

Pascual: Ruperta Pascual, as the guardian of her minor children, the herein defendants, petitioned the Court of FirstInstance of Ilocos Norte for authorization to sell "the six-sevenths of the one-half of the warehouse, of 14 by 11 meters,together with its lot.

Issue:Whether or not the sale was valid?

Held: Hence, as the facts aforestated only show that a building was erected on another's ground, the question should bedecided in accordance with

the statutes that, thirty years ago, governed accessions to real estate, and which were Laws 41 and 42, title 28, of thethird Partida, nearlyidentical with the provisions of articles 361 and 362 of the Civil Code.

So, then, pursuant to article 361, the owner of the land on which abuilding is erected in good faith has a right toappropriate such edifice to himself, after payment of the indemnity prescribed in articles 453 and 454,or to oblige thebuilder to pay him the value of the land. Such, and no other, is the right to which the plaintiff are entitled.For the foregoingreasons, it is only necessary to annul the sale of the said lot which was made by Ruperta Pascual, in representation of herminor children, to Cu Joco, and to maintain the latter in the use of the lot until the plaintiffs shall choose one or the other ofthe two rights granted them byarticle 361 of the Civil Code. Art. 448. The owner of the land on which anything has beenbuilt, sown or planted in good faith, shall have the right to appropriate as his own theworks, sowing or planting, afterpayment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay theprice ofthe land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if itsvalue isconsiderably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of theland does not choose toappropriate the building or trees after proper indemnity. The parties shall agree upon the terms ofthe lease and in case of disagreement, the courtshall fix the terms thereof. (361a) Art. 449. He who builds, plants or sowsin bad faith on the land of another, loses what is built, planted or sown without right to indemnity.