G.R. No.

L-46240

November 3, 1939

MARGARITA QUINTOS and ANGEL A. ANSALDO, plaintiffs-appellants,

vs.
BECK, defendant-appellee.
FACTS:
Quintos and Beck entered a contract of lease, whereby Beck will occupy Quintos house. Quintos
granted Beck the use of the furniture found on the leased house, among these were three gas
heaters and 4four electric lamps, subject to the condition that the defendant would return them to the
plaintiff upon the latter's demand. Quintos sold the property to MariaLopez and Rosario Lopez and
thereafter notified Beck of the conveyance, giving him sixty days to vacate the premises under one of
the clauses of the contract. Quintos also required Beck return all the furniture transferred to him.
Defendants Claim:
Beck informed Quintos that the latter can get the furniture at the ground floor of the house. At a later
date, Beck told Quintos that he will return only the other furniture but not the gas heaters and the
electric lamps as he is to return them only after the expiration of the lease contract. When the lease
contract expired, Beck deposited the furniture to the sheriffs warehouse.
Plaintiffs Claim:
Quintos refused to get the furniture because Beck declined to deliver all of them. Consequently,
Quintos brought an action to compel Beck to return her certain furniture. The trial court ruled in favour
of Beck holding that Quintos failed to comply with her obligation to get the furniture when they were
offered to her. On appeal, the Court of First Instance of Manila affirmed the lower courts decision.
Hence, this petition.

The plaintiffs contend that the trial court incorrectly applied the law: in holding that they violated the
contract by not calling for all the furniture when the defendant placed them at their disposal; in not
ordering the defendant to pay them the value of the furniture in case they are not delivered; in holding
that they should get all the furniture from the Sheriff at their expenses; in ordering them to pay-half of
the expenses claimed by the Sheriff for the deposit of the furniture; in ruling that both parties should
pay their respective legal expenses or the costs; and in denying pay their respective legal expenses
or the costs; and in denying the motions for reconsideration and new trial.

ISSUE: Whether or not the defendant is bound to return the furniture to the plaintiff upon demand.

RULING:
YES. The contract entered into between the parties is one of commadatum. Under it, the plaintiff
gratuitously granted the use of the furniture to the defendant, reserving for herself the ownership

thereof. By this contract, the defendant bound himself to return the furniture to the plaintiff, upon the
latters demand. The obligation voluntarily assumed by the defendant to return the furniture upon the
plaintiff's demand, means that he should return all of them to the plaintiff at the latter's residence or
house. (clause 7 of the contract, Exhibit A; articles 1740, paragraph 1, and 1741 of the Civil Code)
The defendant did not comply with this obligation when he merely placed them at the disposal of the
plaintiff, retaining for his benefit the three gas heaters and the four electric lamps. The provisions of
article 1169 of the Civil Code cited by counsel for the parties are not squarely applicable. The trial
court, therefore, erred when it came to the legal conclusion that the plaintiff failed to comply with her
obligation to get the furniture when they were offered to her.
G.R. No. L-4150

February 10, 1910

FELIX DE LOS SANTOS, plaintiff-appelle,

vs.
AGUSTINA JARRA, administratrix of the estate of Magdaleno Jimenea, deceased, defendantappellant.
FACTS:
De los Santos owned 10 carabaos which he lent to Jimenea to be used in animal-power mill of his
hacienda. The 10 carabaos were not returned upon De los Santos demand. Jimenea died and Jarra
was appointed to be the administratrix of his estate. De los Santos filed for the exclusion of his
carabaos with the commissioners of Jimeneas estate. The commissioners rejected her claim.
Defendants claim:
Jarra was contending that only 3 carabaos were given to Jimenea and afterwards these 3 were also
sold to him (Jimenea). T
Plaintiffs claim:
The defendant has admitted that Jimenea asked the plaintiff for the loan of ten, as shown by two
letters addressed by the said Jimenea to Felix de los Santos; but the said defendant alleged that the
late Jimenea only obtained three second-class carabaos, which were subsequently sold to him by the
owner, Santos; therefore, in order to decide this litigation it is indispensable to prove that Jimenea
only received three carabaos from his son-in-law Santos, and that they were sold to him.
The record shows that it has been fully proven from the testimony of witnesses that Santos, sent in
charge of various persons the ten carabaos requested by Jimenea, in the two letters, and that
Jimenea received them in the presence of said persons, one being a brother of said Jimenea, who
saw the animals arrive at the hacienda. Four died of rinderpest, leaving six surviving carabaos.

The alleged purchase of three carabaos is not evidenced by any trustworthy documents such as
those of transfer, nor were the declarations of the witnesses presented by the defendant affirming it
satisfactory; for said reason it cannot be considered that Jimenea only received three carabaos on
loan from his son-in-law, and that he afterwards kept them definitely by virtue of the purchase.

The court stated that Jarra had no basis in his claim and rendered judgment against to him to give 6
carabaos or its equivalent value . Jarra appealed.
ISSUE: Whether or not the contract is one of commodatum.
YES. The carabaos were given on commodatum as these were delivered to be used by defendant.
The Supreme Court held that there is no evidence of the sale between Jimenea and de los Santos.
The carabaos delivered to be used were not returned by Jiminea upon demand. There is no doubt
that Jarra is under the obligation to indemnify delos Santos. Since the 6 carabaos were not the
property of the deceased or of any of his descendants, it is the duty of the administratrix of the estate
to either return them or indemnify the owner thereof of their value.
The obligation of the bailee or of his successors to return either the thing loaned or its value is
sustained by the tribunal of Spain which said in its decision (mentioned jurisprudence): legal doctrine
touching commodatum as follows: Although it is true that in a contract of commodatum the bailor
retains the ownership of thing loaned at the expiration of the period, or after the use for which it was
loaned has been accomplished, it is the imperative duty of the bailee to return the thing itself to its
owner, or to pay him damages if through the fault of the bailee the thing should have been lost or
injured.
G.R. No. L-24968 April 27, 1972
SAURA IMPORT and EXPORT CO., INC., plaintiff-appellee,
vs.
DEVELOPMENT BANK OF THE PHILIPPINES, defendant-appellant.

FACTS:
In July 1952, Saura, Inc., applied to Rehabilitation Finance Corp., now DBP, for an industrial loan of
P500,000 to be used for the following:

the construction of a factory building (P250,000.00),

to pay the balance of the jute mill machinery and equipment (240,900.00); and
as additional working capital (9,100.00).

In Resolution No.145, the loan application was approved to be secured first by mortgage on the
factory buildings, the land site, and machinery and equipment to be installed.
The mortgage was registered and documents for the promissory note were executed. But then, later
on, was cancelled to make way for the registration of a mortgage contract over the same property in
favor of Prudential Bank and Trust Co., the latter having issued Saura letter of credit for the release of
the jute machinery. As security, Saura execute a trust receipt in favor of the Prudential. For failure of
Saura to pay said obligation, Prudential sued Saura.

After almost 9 years, Saura Inc, commenced an action against RFC.

Plaintiffs claim:
There was failure of RFC to comply with its obligations to release the loan applied for and approved,
thereby preventing the plaintiff from completing or paying contractual commitments it had entered
into, in connection with its jute mill project.
The trial court ruled in favor of Saura, ruling that there was a perfected contract between the parties
and that the RFC was guilty of breach thereof.

Defendants Claims:
(1) The plaintiff's cause of action had prescribed, or that its claim had been waived or abandoned; (2)
that there was no perfected contract; and (3) that assuming there was, the plaintiff itself did not
comply with the terms thereof.

ISSUE: Whether or not there was a perfected contract between the parties.

RULING:
YES. There was indeed a perfected consensual contract.
Article 1934 provides: An accepted promise to deliver something by way of commodatum or simple
loan is binding upon the parties, but the commodatum or simple loan itself shall not be perfected until
delivery of the object of the contract.
There was undoubtedly offer and acceptance in the case. The application of Saura, Inc. for a loan of
P500,000.00 was approved by resolution of the defendant, and the corresponding mortgage was
executed and registered. But this fact alone falls short of resolving the basic claim that the defendant
failed to fulfill its obligation and the plaintiff is therefore entitled to recover damages
When an application for a loan of money was approved by resolution of the respondent corporation
and the responding mortgage was executed and registered, there arises a perfected consensual
contract.
However, it should be noted that RFC imposed two conditions (availability of raw materials and
increased production) when it restored the loan to the original amount of P500,000.00.
Saura, Inc. obviously was in no position to comply with RFCs conditions. So instead of doing so and
insisting that the loan be released as agreed upon, Saura, Inc. asked that the mortgage be cancelled.
The action thus taken by both parties was in the nature of mutual desistance which is a mode of
extinguishing obligations. It is a concept that derives from the principle that since mutual agreement
can create a contract, mutual disagreement by the parties can cause its extinguishment.

WHEREFORE, the judgment appealed from is reversed and the complaint dismissed.