PAJUYO V CA
case the contractual relation is called a
PETITIONER: Colito T. Pajuyo
RESPONDENTS: Court of Appeals
Eddie Guevarra
CITATION: GR No. 146364
DATE: June 3, 2004
PONENTE: Carpio, J.
FACTS:
Petitioner COLITO PAJUYO
o paid PhP400.00 to a certain Pedro Perez for
the rights over a 250-square meter lot in Barrio
Payatas, Quezon City. Pajuyo then
constructed a house made of light materials on
the lot. Pajuyo and his family lived in the house
from 1979 to 7 December 1985.
December 8, 1985 - Pajuyo and private respondent
Eddie Guevarra (Guevarra) executed a Kasunduan or
agreement. Pajuyo, as owner of the house, allowed
Guevarra to live in the house for free provided Guevarra
would maintain the cleanliness and orderliness of the
house. Guevarra promised that he would voluntarily
vacate the premises on Pajuyos demand.
September 1994 - Pajuyo informed Guevarra of his
need of the house and demanded that Guevarra vacate
the house. Guevarra refused. Pajuyo filed an ejectment
case before the MTC.
Guevarra claimed that Pajuyo had no valid title over the
lot since it is within the area set aside for socialized
housing.
MTC rendered its decision in favor of Pajuyo, which was
affirmed by RTC. (MTC and RTC basically ruled that the
Kasunduan created a legal tie akin to that of a landlord
and tenant relationship).
CA reversed the RTC decision, stating that the
ejectment case is without legal basis since both Pajuyo
and Guevarra illegally occupied the said lot. CA further
stated that both parties are in pari delicto; thus, the court
will leave them where they are. CA ruled that the
Kasunduan is not a lease contract, but a commodatum
because the agreement is not for a price certain.
ISSUE: WON the contractual relationship between
Pajuyo and Guevarra was that of a commodatum
HELD:
o No. In a contract of commodatum, one of the
parties delivers to another something not
consumable so that the latter may use the
same for a certain time and return it. An
essential feature of commodatum is that it is
gratuitous. Another feature of commodatum is
that the use of the thing belonging to another is
for a certain period. Thus, the bailor cannot
demand the return of the thing loaned until
after expiration of the period stipulated, or after
accomplishment of the use for which the
commodatum is constituted. If the bailor should
have urgent need of the thing, he may demand
its return for temporary use. If the use of the
thing is merely tolerated by the bailor, he can
demand the return of the thing at will, in which
precarium. Under the Civil Code, precarium is
a kind of commodatum.
o 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.
o Even assuming that the relationship between
Pajuyo and Guevarra is one of commodatum,
Guevarra as bailee would still have the duty to
turn over possession of the property to Pajuyo,
the bailor. The obligation to deliver or to return
the thing received attaches to contracts for
safekeeping, or contracts of commission,
administration and commodatum. These
contracts certainly involve the obligation to
deliver or return the thing received.
o Guevarra turned his back on the Kasunduan
on the sole ground that like him, Pajuyo is also
a squatter. Guevarra should know that there
must be honor even between squatters.
Guevarra freely entered into the Kasunduan.
Guevarra cannot now impugn the Kasunduan
after he had benefited from it. The Kasunduan
binds Guevarra.
o The Kasunduan is not void for purposes of
determining who between Pajuyo and
Guevarra has a right to physical possession of
the contested property. The Kasunduan is the
undeniable evidence of Guevarras recognition
of Pajuyos better right of physical possession.
Guevarra is clearly a possessor in bad faith.
The absence of a contract would not yield a
different result, as there would still be an
implied promise to vacate.
PRODUCERS BANK V CA
PETITIONER: Producers Bank of the Philippines
RESPONDENTS: Court of Appeals
Franklin Vives
CITATION: GR No. 115324
DATE: February 19, 2003
PONENTE: Callejo, Sr., J
FACTS:
Franklin Vives (private respondent) was asked by
his neighbour/friend, ANGELES SANCHEZ, to help to
 help her friend and townmate, COL. ARTURO
DORONILLA, in incorporating his business, the Sterela
Marketing and Services (Sterela).
o ANGELES asked FRANKLIN to deposit in a
bank a certain amount of money in the bank
account of Sterela for purposes of its
incorporation. She assured private respondent
that he could withdraw his money from said
account within a months time.
o May 9, 1979 FRANKLIN, COL. DORONILLA,
ANGELES, and a certain ESTRELLA
DUMAGPI (secretary of Col. Doronilla), met
and discussed the matter. Thereafter, relying
on the assurances and representations of
ANGELES and COL. DORONILLA,
FRANKLIN issued a check in the amount of
P200,000.00 in favor of Sterela.
o MRS. INOCENCIA VIVES, ANGELES, and
ESTRELLA, then went to the Buendia, Makati
branch of PRODUCERS BANK OF THE
PHILIPPINES to open an account in the name
of Sterela, with Mrs. Vives and Sanchez as
signatories. A passbook was then issued to
Mrs. Vives.
Subsequently, FRANKLIN learned that Sterela was no
longer holding office in the address previously given to
him.
o Alarmed, he and his wife went to the Bank to
verify if their money was still intact.
o The bank manager referred them to Mr. Rufo
Atienza, the assistant manager, who informed
them that part of the money in Savings Account
No. 10-1567 had been withdrawn by Doronilla,
and that only P90,000.00 remained therein.
o He likewise told them that Mrs. Vives could not
withdraw said remaining amount because it
had to answer for some postdated checks
issued by Doronilla. According to Atienza, after
Mrs. Vives and Sanchez opened Savings
Account No. 10-1567, Doronilla opened
Current Account No. 10-0320 for Sterela and
authorized the Bank to debit Savings Account
No. 10-1567 for the amounts necessary to
cover overdrawings in Current Account No. 10-
0320. In opening said current account, Sterela,
through Doronilla, obtained a loan of
P175,000.00 from the Bank.
o To cover payment thereof, Doronilla issued
three postdated checks, all of which were
dishonored. Atienza also said that Doronilla
could assign or withdraw the money in Savings
Account No. 10-1567 because he was the sole
proprietor of Sterela.
FRANKLIN tried to get in touch with COL. DORONILLA,
through ANGELES.
o On June 29, 1979 he received a letter from
Doronilla, assuring him that his money was
intact and would be returned to him.
o On August 13, 1979, Doronilla issued a
postdated check for P212,000.00 in favor of
FRANKLIN. However, upon presentment
thereof by FRANKLIN to the drawee bank, the
check was dishonored.
o Doronilla requested FRANKLIN to present the
same check on September 15, 1979 but when
the latter presented the check, it was again
dishonored.
o FRANKLIN referred the matter to a lawyer,
who made a written demand upon Doronilla for
the return of his clients money. Doronilla
issued another check for P212,000.00 in
private respondents favor but the check was
again dishonored for insufficiency of funds.
FRANKLIN instituted an action for recovery of sum of
money in the Regional Trial Court (RTC) in Pasig, Metro
Manila against COL. DORONILLA, SANCHEZ,
DUMAGPI and PETITIONER BANK.
RTC ruled in favour of the private respondent
FRANKLIN. Rendered defendants to pay plaintiff jointy
and severally:
o the amount of P200,000.00, representing the
money deposited, with interest at the legal rate
from the filing of the complaint until the same is
fully paid
o the sum of P50,000.00 for moral damages and
a similar amount for exemplary damages
o the amount of P40,000.00 for attorneys fees
o costs of the suit.
CA affirmed in toto.
ISSUE: WON the Petitioner Bank should be held jointly
and severally liable together with the other defendants
for the amount of P200,000.00 representing the savings
account deposit, P50,000.00 for moral damages,
P50,000.00 for exemplary damages, P40,000.00 for
attorneys fees and the costs of suit
HELD: YES.
o Under Article 2180 of the Civil Code,
employers shall be held primarily and solidarily
liable for damages caused by their employees
acting within the scope of their assigned tasks.
To hold the employer liable under this
provision, it must be shown that an employer-
employee relationship exists, and that the
employee was acting within the scope of his
assigned task when the act complained of was
committed. Case law in the United States of
America has it that a corporation that entrusts
a general duty to its employee is responsible to
the injured party for damages flowing from the
employees wrongful act done in the course of
his general authority, even though in doing
such act, the employee may have failed in its
duty to the employer and disobeyed the latters
instructions.
o There is no dispute that Atienza was an
employee of petitioner. Furthermore, petitioner
did not deny that Atienza was acting within the
scope of his authority as Assistant Branch
Manager when he assisted Doronilla in
withdrawing funds from Sterelas Savings
Account No. 10-1567, in which account private
 respondents money was deposited, and in
transferring the money withdrawn to Sterelas
Current Account with petitioner. Atienzas acts
of helping Doronilla, a customer of the
petitioner, were obviously done in furtherance
of petitioners interests even though in the
process, Atienza violated some of petitioners
rules such as those stipulated in its savings
account passbook. It was established that the
transfer of funds from Sterelas savings
account to its current account could not have
been accomplished by Doronilla without the
invaluable assistance of Atienza, and that it
was their connivance which was the cause of
private respondents loss.
o The foregoing shows that the Court of Appeals
correctly held that under Article 2180 of the
Civil Code, petitioner is liable for private
respondents loss and is solidarily liable with
Doronilla and Dumagpi for the return of the
P200,000.00 since it is clear that petitioner
failed to prove that it exercised due diligence to
prevent the unauthorized withdrawals from
Sterelas savings account, and that it was not
negligent in the selection and supervision of
Atienza. Accordingly, no error was committed
by the appellate court in the award of actual,
moral and exemplary damages, attorneys fees
and costs of suit to private respondent.
o WHEREFORE, the petition is hereby
DENIED. The assailed Decision and
Resolution of the Court of Appeals are
AFFIRMED.
PRODUCERS BANK V CA
PETITIONER: People of the Ph
RESPONDENTS: Venancio Concepcion
CITATION: GR No. L-19190
DATE: November 29, 1922
PONENTE: Malcolm, J.
FACTS:
VENANCIO CONCEPCION - President of the Philippine
National Bank and a member of the Board thereof,
authorized an extension of credit in favor of Puno y
Concepcion, S. en C. to the manager of the Aparri
branch of the Philippine National Bank.
Puno y Concepcion, S. en C. was a co-partnership
where Concepcion is a partner.
o Subsequently, Concepcion was charged and
found guilty in the Court of First Instance of
Cagayan with violation of section 35 of Act
No.2747. Section 35 of Act No. 2747 provides
that the National Bank shall not, directly or
indirectly, grant loans to any of the members of
the board of directors of the bank nor to agents
of the branch banks.
Counsel for the defense argue that the documents of
record do not prove that authority to make a loan was
given, but only show the concession of a credit. They
averred that the granting of a credit to the co-partnership
Puno y Concepcion, S. en C. by Venancio
Concepcion, President of the Philippine National Bank,
is not a loan within the meaning of section 35 of Act
No. 2747.
ISSUE: WON the granting of a credit of P300,000 to the
co-partnership Puno y Concepcion, S. en C. by
Venancio Concepcion, President of the Philippine
National Bank, a loan within the meaning of section 35
of Act No. 2747
HELD:
o The Supreme Court ruled in the affirmative.
o The credit of an individual means his ability to
borrow money by virtue of the confidence or
trust reposed by a lender that he will pay what
he may promise.
o A loan means the delivery by one party and
the receipt by the other party of a given sum of
money, upon an agreement, express or
implied, to repay the sum loaned, with or
without interest. The concession of a credit
necessarily involves the granting of loans up
to the limit of the amount fixed in the credit.
In the interpretation and construction, the primary rule is
to ascertain and give effect to the intention of the
Legislature. Section 49 in relation to Sec. 25 of Act No.
2747 provides a punishment for any person who shall
violate any provisions of the Act. Defendant contends
that the repeal of these Sections by Act No. 2938 has
served to take away basis for criminal prosecution. The
Court holds that where an act of the Legislature which
penalizes an offense repeals a former act which
penalized the same offense, such repeal does not
have the effect of thereafter depriving the Courts of
jurisdiction to try, convict and sentence offenders
charged with violations of the old law.
BONNEVIE V CA
PETITIONER: Raoul S.V. Bonnevie
Honesto V. Bonnevie
RESPONDENTS: Hon. Court of Appeals
Philippine Bank of Commerce
CITATION: GR No. L-49101
DATE: October 24, 1983
PONENTE: Guerrero, J.
FACTS:
Spouses Jose M. Lozano and Josefa P. Lozano -
mortgaged their property to secure the payment of a
loan amounting to PhP 75,000 with private respondent
Philippine Bank of Communication (PBCom).
o The deed of mortgage was executed on
December 6, 1966, but the loan proceeds were
received only on December 12, 1966.
Two days after the execution of the deed of mortgage,
the spouses sold the property to the petitioner Bonnevie
for and in consideration of PhP 100,000
 o 25K of which payable to the spouses and 75K
as payment to PBCom.
o Afterwhich, Bonnevie defaulted payments to
PBCom prompting the latter to auction the
property after Bonnivie failed to settle despite
subsequent demands, in order to recover the
amount loaned.
The latter now assails the validity of the mortgage
between Lozano and PBCom arguing that on the day
the deed was executed there was yet no principal
obligation to secure as the loan of P75,000.00 was not
received by the Lozano spouses, so that in the absence
of a principal obligation, there is want of consideration in
the accessory contract, which consequently impairs its
validity and fatally affects its very existence.

ISSUE: WON there was a perfected contract of loan

HELD:
o Yes. From the recitals of the mortgage deed
itself, it is clearly seen that the mortgage deed
was executed for and on condition of the loan
granted to the Lozano spouses. The fact that
the latter did not collect from the respondent
Bank the consideration of the mortgage on the
date it was executed is immaterial. A contract
of loan being a consensual contract, the herein
contract of loan was perfected at the same time
the contract of mortgage was executed. The
promissory note executed on December 12,
1966 is only an evidence of indebtedness and
does not indicate lack of consideration of the
mortgage at the time of its execution.
o Respondent Bank had every right to rely on the
certificate of title. It was not bound to go behind
the same to look for flaws in the mortgagor's
title, the doctrine of innocent purchaser for
value being applicable to an innocent
mortgagee for value.
o Thru certificate of sale in favor of appellee was
registered on September 2, 1968 and the one
year redemption period expired on September
3, 1969. It was not until September 29, 1969
that Honesto Bonnevie first wrote respondent
and offered to redeem the property.
o The loan matured on December 26, 1967 so
when respondent Bank applied for foreclosure,
the loan was already six months overdue.
Payment of interest on July 12, 1968 does not
make the earlier act of PBC inequitous nor
does it ipso facto result in the renewal of the
loan. In order that a renewal of a loan may be
effected, not only the payment of the accrued
interest is necessary but also the payment of
interest for the proposed period of renewal as
well. Besides, whether or not a loan may be
renewed does not solely depend on the debtor
but more so on the discretion of the bank.