1.

Acme vs CA

Facts:

- Petitioner chua pac, the president and general manager of co-petitioner “acme shoe, rubber & plastic
corporation” executed on 27 June 1978, for and in behalf of the company, a chattel mortgage in favor of
private respondent producers bank of the Philippines. It stood as security for a loan for 3m pesos.
- "(c) If the MORTGAGOR, his heirs, executors or administrators shall well and truly perform the full obligation
or obligations above-stated according to the terms thereof, then this mortgage shall be null and void. x x x.
- The loan of 3m pesos was paid in due time. Subsequently in 1981, additional financial accommodation was
provided by the bank for a total of 2.7m. was also paid in due time
- Another loan of 1m pesos was made in 1984. Covered by 4 promissory notes for 250k. loan was not settled
in its maturity.
- Foreclosure was applied by the bank. Petitioner instead file an action for injunction with damages and a
prayer for a writ of preliminary injunction before the RTC of caloocan city. Dismissed, chattel mortgage
forclosure was continued. Appealed to CA but denied.

Issue:

Would it be valid and effective to have a clause in a chattel mortgage that purports to likewise extend its coverage
to obligations yet to be contracted or incurred?

Held:

No, Contracts of security are either personal or real. In contracts of personal security, such as a guaranty or a
suretyship, the faithful performance of the obligation by the principal debtor is secured by the personal commitment
of another (the guarantor or surety). In contracts of real security, such as a pledge, a mortgage or an antichresis,
that fulfillment is secured by an encumbrance of property. chattel mortgage, however, can only cover obligations
existing at the time the mortgage is constituted. Although a promise expressed in a chattel mortgage to include
debts that are yet to be contracted can be a binding commitment that can be compelled upon, the security itself,
however, does not come into existence or arise until after a chattel mortgage agreement covering the newly
contracted debt is executed either by concluding a fresh chattel mortgage or by amending the old contract
conformably with the form prescribed by the Chattel Mortgage Law. Refusal on the part of the borrower to execute
the agreement so as to cover the after-incurred obligation can constitute an act of default on the part of the
borrower of the financing agreement whereon the promise is written but, of course, the remedy of foreclosure can
only cover the debts extant at the time of constitution and during the life of the chattel mortgage sought to be
foreclosed.

WHEREFORE, the questioned decisions of the appellate court and the lower court are set aside without prejudice
to the appropriate legal recourse by private respondent as may still be warranted as an unsecured creditor. No
costs.
 2. Pajuyo vs CA

Facts:

- In june 1979, petitioner pajuyo paid 400 to a certain pedro perez for the rights over a 250sq/m lot in payatas
quezon city. He then constructed a house of light materials and lived in the house from 1979 to 1985.
- Pajuyo and private respondent guevarra entered into a kasunduan allowing the latter to live in the house
provided that the latter would maintain the cleanliness and orderliness of the housed. And guevarra
promised, he would vacate the premises upon pajuyos demand
- 1994 pajuyo informed Guevara of his need of the house and instructed the latter to vacate it. The latter
refused
- An ejectment case was filed against guevarra. In his answer, guevarra claimed that pajuyo had no valid title
or oright of possession over the where the house stands because the lot is within the 150 hectares set aside
by proclamation no.137 for socialized housing.
- MTC and RTC approved pajuyos motion. CA reverse stating that they are both illegal settlers and therefore
in pari delicto for occupying a public lot.

Issue:

Whether or not the ruling of the CA as to the kasunduan being a comodatum is valid and the parties being in pari
delicto also valid?

Held:

No, the supreme court ruled that the parties are not in pari delicto for both occupying because the principle
of in pari delicto is not applicable in ejectment cases. To shut out relief to squatters on the ground of pari
delicto would openly invite mayhem and lawlessness. A squatter would oust another squatter from possession of
the lot that the latter had illegally occupied, emboldened by the knowledge that the courts would leave them where
they are. Nothing would then stand in the way of the ousted squatter from re-claiming his prior possession at all
cost.

Possession is the only issue for resolution in an ejectment case, therefore the CA’s ruling as to the
applicability of proclamation no. 137 does not hold any fruit for a few reasons. 1. The contested lot is not covered
by the law 2. The CA has no authority to substantiate the claim of guevaras due to the latters inaction of claiming
the land through the stated law and 3. The courts are only limited to question of physical possession.

The SC also did not agree that the kasunduan was a comodatum. 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 the termination of
the lease the tenants withholding of the property would then be unlawful. This is settled jurisprudence
 3. RP vs Bagtas

Facts:

- On 8 may 1948, jose v bagtas borrowed from the republic of the Philippines through the bureau of animal
industry three bulls for a period of one year for breeding purposes subject to a government charge of
breeding fee of 10% of the book of the valufe othe bulls.
- Upon expiration, he asked for a renewal thereof only for one bull for another year.
- Bagtas then wrote the director of animal industry of his intentions to buy the three bull.
- Bagtas failed to pay and to return the bulls.
- CFI ordered the return of the 3 bulls loaned and payment of their book value in total of 3241.45 and the
unpaid breeding fee in the sum of 199.62
- The two bulls were returned however the other one died of a gun shot due to a huk raid on hacienda
Felicidad. They claimed that the death was due to a force majeure and therefore she is relieved from the
duty to return the bull or paying its value.
- Respondent argued that the agreement was a comodatum and petitioner should suffer the loss due to force
majeure.
- Petitioner argued that the breeding compensation made it a contract of lease of the bull and the continued
possession of the bulls made them a possessor in bad faith

Issue:

Whether or not bagtas is relieved due to force majeure?

Held:

No, The contention is without merit. The loan by the appellee to the late defendant Jose V. Bagtas of the three
bulls for breeding purposes for a period of one year from 8 May 1948 to 7 May 1949, later on renewed for another
year as regards one bull, was subject to the payment by the borrower of breeding fee of 10% of the book value of
the bulls. The appellant contends that the contract was commodatum and that, for that reason, as the appellee
retained ownership or title to the bull it should suffer its loss due to force majeure. A contract of commodatum is
essentially gratuitous.1 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 after the expiry of the contract. And even if the
contract be 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;
 4. Producers Bank of the Philippines vs CA

Facts:

- In 1979, private respondent franklin vives was asked by his neighbor and friend angeles sanchez to help her
friend and townmate, col. Arturo doronilla, in incorporating his business.
- Sanchez asked the private respondent to deposit in a bank a certain amount of money in the bank account
of Sterela Marketing and Services for purpose of its incorporation.
- She assured that private respondent that he could withdraw his money from said account within a month
time.
- A check was issued for the amount of 200k to be deposited on the bank account of the business.
- Private respondent learned that sterela was no longer holding office in the address previous given to him.
They were later informed that only 90k of the 200k they had lend was remaining.
- Private respondent could not withdraw the remaining amount because he would have to answer for the
postdated checks issued by doronilla.
- Doronilla created another account to which a loan of 175k was made, attaching the previous account to it
stating that doronilla was the sole proprietor of the business. Doronilla then issued postdated checks that
were later dishonored.
- Doronilla issued a check for 212k representing the value of private respondent’s money that was lend to
him, however the check was dishonored.
- Private respondent filed an action for recovery of sum of money and a criminal action against petitioner in
the RTC pasig. RTC ruled in favor of vives ordering the payment of sum of money and additional fees.
- Petitioner argues that the contract was a mutuum due to the interest obtained. Represented by the
payment of check amounting to 212k.
- CA ruled that it is a comodatum.

Issues:

Whether or not the lending of 200k constitute a comodatum or mutuum?

Held:

It is a comodatum, In commodatum, the bailor retains the ownership of the thing loaned, while in simple loan,
ownership passes to the borrower. The foregoing provision 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. Article 1936 of the Civil Code provides:

Consumable goods may be the subject of commodatum if the purpose of the contract is not the consumption of
the object, as when it is merely for exhibition.

Thus, if consumable goods are loaned only for purposes of exhibition, or when the intention of the parties is to lend
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.

The rule is that the intention of the parties thereto shall be accorded primordial consideration in determining the
actual character of a contract.

As correctly pointed out by both the Court of Appeals and the trial court, the evidence shows that private respondent
agreed to deposit his money in the savings account of Sterela specifically for the purpose of making it appear that
said firm had sufficient capitalization for incorporation, with the promise that the amount shall be returned within
thirty (30) days. Private respondent merely accommodated Doronilla by lending his money without consideration,
as a favor to his good friend Sanchez. It was however clear to the parties to the transaction that the money would
not be removed from Sterelas savings account and would be returned to private respondent after thirty (30) days.
 5. United states vs morales

Facts:

The defendants were accused of the crime of estafa under article 535, subdivision 5, of the Penal Code. Nicomedes
Morales was convicted in the court below and condemned to four months and one day of arresto mayor, to
indemnify the party injured in the sum of P666.05, to the accessories mentioned in article 61 of the Penal Code,
and to pay the costs of the action. Crispina Morco was acquitted, Nicomedes Morales appealed.

It appears that the defendants received from Hatin Cafure to sell on commission certain jewels and jewelry of the
value of something more than P1,000. They sold all of said jewels and jewelry, and upon a settlement of their
accounts with said Hatin Cafure it was found that there was due to him from the defendants the sum of P666.05.
The defendants did not pay him that sum in cash, nor did they return to him the jewels and jewelry which that sum
represented.

In receiving the said articles from Hatin Cafure the defendants gave to him a receipt in substantially the following
form:

"Received of Mr. Atim Kapuri goods taken on commission which amount to P1,384.10 on account of him
who subscribes.

"Legaspi, 14th of March, 1905.

"(Signed) NICOMEDES MORALES."

This receipt constitutes the only written evidence of the terms of the agreement upon which the property was taken
by the defendants.

The defendants upon the trial and in their defense introduced in evidence promissory notes amounting to the
said sum of P666.05, given to the defendants by persons to whom had been sold the jewels and jewelry amounting
to that sum. These notes the defendants had several times tendered to the owner as the proceeds of the jewelry
sold. The defendants offered, if the owner would give them time, to collect these notes and pay him the
proceeds. It appears undisputed that the sales of the jewelry were made in good faith by the defendants and
that the promissory notes taken from the purchasers of said jewelry by the defendants were bona fide in
every respect. It does not appear whether the notes were good, bad, or indifferent, collectible or
uncollectible. Neither does it appear what they were actually worth. The only evidence produced by the
prosecution and, therefore, the only evidence upon which the defendants were convicted, was, as before stated,
that they had taken the property in question upon the terms and conditions mentioned in the receipt above quoted
and that they had failed to return either jewelry or the value thereof, but, instead, had sold said jewelry on credit
and taken promissory notes from the purchasers for the purchase price.

Held: "In the matter of estafa, this is unquestionably the article which is most frequently applied in practice, it being
also the one that presents the most difficulties. It is therefore advisable to take carefully into consideration the
essential elements of the same. The fact of having received a thing constitutes the first element, and in this the
said crime differs from that of theft, the first,element of which is the taking of the thing. It is important to bear in
mind such an essential circumstance so as not to mistake the one crime for the other. In Question 11 of the
commentary on article 533, we have already seen that, by reason of having overlooked such an important distinction,
the appeal in casacidn interposed by the public prosecutor in the case therein dealt with was rejected. The second
requisite consists in that the thing received be money, goods, or any other personal property, in a word, anything
which, owing to its value, may be an article of trade, among which we think are deeds and documents the
appropriation or misappropriation of which might cause a material prejudice as, for example, a deed of sale, a
promissory note, a receipt for money, etc. The third element of this crime consists in that the above-stated things
may have been received by virtue of deposit, on commission, or for administration, or under any other title
producing the obligation to deliver or return them; that is, to deliver or return the same thing that was received (not
an equivalent thereto in kind or quality), as happens with the deposit, commission, and administration specially
dealt with in said article, and also, for example, in the contract of commodatum by which the bailee is required
to return the same thing that he received for a stated use. Finally, the fourth and last requisite essential to the
crime defined in this number consists in the appropriation or misappropriation of the thing by whoever received it
under such a title and which obliges him to make restitution thereof, or denying the fact that he received it."