BPI Investment Corporation -vs- CA

GR No. 133632, 15 February 2002

377 SCRA 117

FACTS

Frank Roa obtained a loan from Ayala Investment and Development Corporation (AIDC), for
the construction of his house. Said house and lot were mortgaged to AIDC to secure the loan.
Roa sold the properties to ALS and Litonjua, the latter paid in cash and assumed the balance
of Roa’s indebtedness with AIDC. AIDC was not willing to extend the old interest to private
respondents and proposed a grant of new loan of P500,000 with higher interest to be applied
to Roa’s debt, secured by the same property. Private respondents executed a mortgage deed
containing the stipulation. The loan contract was signed on 31 March 1981 and was perfected
on 13 September 1982, when the full loan was released to private respondents.

BPIIC, AIDC’s predecessor, released to private respondents P7,146.87, purporting to be what

was left of their loan after full payment of Roa’s loan. BPIIC filed for foreclosure proceedings
on the ground that private respondents failed to pay the mortgage indebtedness. Private
respondents maintained that they should not be made to pay amortization before the actual
release of the P500,000 loan. The suit was dismissed and affirmed by the CA.

ISSUE:

W/N a contract of loan is a consensual contract

HELD:

A loan contract is not a consensual contract but a real contract. It is perfected upon delivery
of the object of the contract. Although a perfected consensual contract can give rise to an
action for damages, it does not constitute a real contract which requires delivery for
perfection. A perfected real contract gives rise only to obligations on the part of the borrower.

In the present case, the loan contract was only perfected on the date of the second release
of the loan.

A contract of loan involves a reciprocal obligation, wherein the obligation or promise of each
party is the consideration for that of the other. It is a basic principle in reciprocal obligations
that neither party incurs in delay, if the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. Only when a party has performed his part
of the contract can he demand that the other party also fulfills his own obligation and if the
latter fails, default sets in.

DECISION:

The payment of amortization should accrue from the time BPIIC released the loan amount to
ALS and Litonjua because it was only at that time (the delivery of the amount -- the object of
the contract) that the loan contract was perfected.
PHILIPPINE NATIONAL BANK v. RBL ENTERPRISES, GR No. 149569, 2004-05-28

FACTS:

RBL instituted an action against PNB and the Provincial Sheriff of Negros Occidental alleging
that RBL opened a prawn hatchery in San Enrique, Negros Occidental, and leased from Nelly
Bedrejo a parcel of land and applied for and was approved a loan of P2,000,000.00, by PNB.
To secure its payment, RBL executed in favor of PNB, a real estate mortgage over two (2)
parcels of land located at Bago City, Negros Occidental and another real estate and chattel
mortgage over the buildings, culture tanks and other hatchery facilities located in the leased
property of Nelly Bedrejo.

PNB partially released P1,000,000.00 to RBL.

During the mid-part of the construction of the improvements, PNB refused to release the
balance of P1,000,000.00 because RBL failed to comply with the bank's requirement that Nelly
Bedrejo should execute an undertaking or a 'lessors' conformity' provided in Real Estate and
Chattel Mortgage contract

For said alleged failure of RBL to comply with the additional requirement and the demand of
PNB to pay the released amount of P1,000,000.00, PNB foreclosed the mortgaged properties
that led to the closure of RBL’s business.

The RTC ruled that PNB had breached its obligation under the Contract of Loan and should
therefore be held liable for the consequential damages suffered by respondents.

CA affirmed the RTC’s decision.

ISSUE:

Whether the non-release of the balance of the loan by PNB is justified.

RULING:

The petition was PARTLY GRANTED. The CA’s decision was AFFIRMED with MODIFICATION
that the award of actual and exemplary damages was deleted.

RATIO DECIDENDI:

If the parties truly intended to suspend the release of the P1,000,000 balance of the loan until
the lessor's conformity to the Mortgage Contract would have been obtained, such condition
should have been plainly stipulated either in that Contract or in the Credit Agreement. The
tenor of the language used in paragraph 9.07, as well as its position relative to the whole
Contract, negated the supposed intention to make the release of the loan subject to the
fulfillment of the clause.

Nowhere did PNB explicitly state that the release of the second half of the loan accommodation
was subject to the mortgagor's procurement of the lessor's conformity to the Mortgage
Contract. Absent such a condition, the efficacy of the Credit Agreement stood, and petitioner
was obligated to release the balance of the loan. Its refusal to do so constituted a breach of
its reciprocal obligation under the Loan Agreement.

The records show that all the real estate and chattel mortgages were registered with the
Register of Deeds of Bago City, Negros Occidental, and annotated at the back of the
mortgaged titles. Thus, petitioner had ample security to protect its interest. As correctly held
by the... appellate court, the lessor's nonconformity to the Mortgage Contract would not cause
petitioner any undue prejudice or disadvantage, because the registration and the annotation
were considered sufficient notice to third parties that the property was subject to an
encumbrance.

Article 2126 of the Civil Code describes the real nature of a mortgage: it is a real right
following the property, such that in subsequent transfers by the mortgagor, the transferee
must respect the mortgage. A registered mortgage lien is considered inseparable from the
property inasmuch as it is a right in rem. The mortgage creates a real right or a lien which,
after being recorded, follows the chattel wherever it goes. Under Article 2129 of the same
Code, the mortgage on the property may still be foreclosed despite the transfer.

Indeed, even if the mortgaged property is in the possession of the debtor, the creditor is still
protected. To protect the latter from the former's possible disposal of the property, the chattel
mortgage is made effective against third persons by the process of registration.

Since PNB failed to release the P1,000,000 balance of the loan, the Real Estate and Chattel
Mortgage Contract became unenforceable to that extent.

Central Bank of the Philippines v. Court of Appeals:

"The consideration of the accessory contract of real estate mortgage is the same as that of
the principal contract. For the debtor, the consideration of his obligation to pay is the existence
of a debt. Thus, in the accessory contract of real estate mortgage, the consideration of the
debtor in furnishing the mortgage is the existence of a valid, voidable, or unenforceable debt.

W]hen there is partial failure of consideration, the mortgage becomes unenforceable to the
extent of such failure. Where the indebtedness actually owing to the holder of the mortgage
is less than the sum named in the mortgage, the mortgage cannot be enforced for more than
the actual sum due."
Spouses Sy, et al. vs. Westmont Bank

G.R. No. 201074

Facts:

Respondent Westmont bank claimed that petitioner Spouses Sy, et al., under the trade
name Moondrops General Merchandising (Moondrops), obtained a loan from them
amounting to a total of P6,429,500 and failed to pay for it.

Petitioners, on the other hand, claimed that the loan application was denied and they got a
loan from a private person named Amado Chua as evidenced by cashier checks from the
latter.

During trial against the petitioners, Westmont presented, claimed that the proceeds of the
loan were credited to the account of Moondrops per its loan manifold. Westmont, however,
never offered such a loan manifold in evidence. The bank presented promissory notes and
disclosure statements attached to their complaint.

Petitioners insisted that the promissory notes and disclosure statement attached to the
complaint were false and different from the documents they had signed.

The issue is whether or not a contract of loan was perfected between the bank and the
petitioners to make them liable for its non-payment.

Held: No.

Simple Loan or mutuum is a real contract perfected thru delivery

A simple loan or mutuum is a contract where one of the parties delivers to another, either
money or other consumable thing, upon the condition that the same amount of the same
kind and quality shall be paid. A simple loan is a real contract and it shall not be
perfected until the delivery of the object of the contract. Necessarily, the delivery of
the proceeds of the loan by the lender to the borrower is indispensable to perfect the
contract of loan. Once the proceeds have been delivered, the unilateral characteristic of the
contract arises and the borrower is bound to pay the lender an amount equal to that
received.

Loan proceeds were not delivered to the petitioners

Petitioners presented a cashier's check, in the amount of P2,429,500.00, obtained from

Chua, which showed that the latter personally provided the loan, and not the bank. As the
proceeds of the loan were not delivered by the bank, there was no perfected contract of
loan. In addition, they doubt the reliability of the promissory notes as their original copies
were not presented before the RTC.
Pajuyo v. CA

Facts:

In June 1979, petitioner Colito T. Pajuyo (Pajuyo) paid P400 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.

On 8 December 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.

In 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 against Guevarra with the Metropolitan Trial Court of Quezon
City, Branch 31 (MTC).

In his Answer, Guevarra claimed that Pajuyo had no valid title or right of possession over the
lot where the house stands because the lot is within the 150 hectares set aside by
Proclamation No. 137 for socialized housing. Guevarra pointed out that from December 1985
to September 1994, Pajuyo did not show up or communicate with him. Guevarra insisted that
neither he nor Pajuyo has valid title to the lot.

MTC: The MTC ruled that the subject of the agreement between Pajuyo and Guevarra is the
house and not the lot. Pajuyo is the owner of the house, and he allowed Guevarra to use the
house only by tolerance. Thus, Guevarras refusal to vacate the house on Pajuyos demand
made Guevarras continued possession of the house illegal.

RTC: The RTC upheld the Kasunduan, which established the landlord and tenant relationship
between Pajuyo and Guevarra. The terms of the Kasunduan bound Guevarra to return
possession of the house on demand.

The RTC rejected Guevarras claim of a better right under Proclamation No. 137, the Revised
National Government Center Housing Project Code of Policies and other pertinent laws. In an
ejectment suit, the RTC has no power to decide Guevarras rights under these laws. The RTC
declared that in an ejectment case, the only issue for resolution is material or physical
possession, not ownership.

CA: Pajuyo and Guevarra are squatters. Pajuyo and Guevarra illegally occupied the contested
lot which the government owned.

Perez, the person from whom Pajuyo acquired his rights, was also a squatter. Perez had no
right or title over the lot because it is public land. Pajuyo and Guevarra are in pari delicto or
in equal fault. The court will leave them where they are.

Kasunduan is not a lease contract but a commodatum because the agreement is not for a
price certain.

Since Pajuyo admitted that he resurfaced only in 1994 to claim the property, the appellate
court held that Guevarra has a better right over the property under Proclamation No. 137.
President Corazon C. Aquino issued Proclamation No. 137 on 7 September 1987. At that time,
Guevarra was in physical possession of the property. Under Article VI of the Code of Policies
Beneficiary Selection and Disposition of Homelots and Structures in the National Housing
Project (the Code), the actual occupant or caretaker of the lot shall have first priority as
beneficiary of the project. The Court of Appeals concluded that Guevarra is first in the
hierarchy of priority.

Issue:

Whether or not the CA erred or abused its authority and discretion tantamount to lack of
jurisdiction in ruling that the Kasunduan voluntarily entered into by the parties was in fact a
commodatum, instead of a Contract of Lease as found by the Metropolitan Trial Court and in
holding that the ejectment case filed against defendant-appellant is without legal and factual
basis.

Held:

The Court do not subscribe to the CA’s theory that the Kasunduan is one of commodatum.

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
case the contractual relation is called a precarium. Under the Civil Code, precarium is a kind
of commodatum.

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.

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.

Guevarra turned his back on the Kasunduan on the sole ground that like him, Pajuyo is also
a squatter. Squatters, Guevarra pointed out, cannot enter into a contract involving the land
they illegally occupy. Guevarra insists that the contract is void.

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.

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.
REPUBLIC OF THE PHILIPPINES vs. JOSE V. BAGTAS, G.R. No. L-17474, October
25, 1962

Facts:
Jose V. Bagtas borrowed from the Republic of the Philippines through the Bureau of Animal
Industry three bulls for a period of one year subject to a government charge of breeding fee
of 10% of the book value of the bulls. Upon the expiration on 7 May 1949 of the contract, the
borrower asked for a renewal for another period of one year. However, was approved a
renewal thereof of only one bull for another year from 8 May 1949 to 7 May 1950 and
requested the return of the other two. Jose V. Bagtas failed to pay the book value of the three
bulls or to return them. In the Court of First Instance of Manila the Republic of the Philippines
commenced an action against him praying that he be ordered to return the three bulls loaned
to him or to pay their book value in the total sum of P3,241.45 and the unpaid breeding fee
in the sum of P199.62, both with interests, and costs; and that other just and equitable relief
be granted.

Felicidad M. Bagtas, the surviving spouse of the defendant Jose Bagtas who died on 23
October 1951 and as administratrix of his estate, was notified. On 7 January 1959 she file a
motion alleging that on 26 June 1952 the two bull Sindhi and Bhagnari were returned to the
Bureau Animal of Industry and that sometime in November 1958 the third bull, the Sahiniwal,
died from gunshot wound inflicted during a Huk raid on Hacienda Felicidad Intal, and praying
that the writ of execution be quashed and that a writ of preliminary injunction be issued. On
31 January 1959 the plaintiff objected to her motion. On 6 February 1959 she filed a reply
thereto. On the same day, 6 February, the Court denied her motion. Hence, this appeal
certified by the Court of Appeals to this Court as stated at the beginning of this opinion.

The appellant contends that the Sahiniwal bull was accidentally killed during a raid by the Huk
in November 1953 upon the surrounding barrios of Hacienda Felicidad Intal, Baggao,
Cagayan, where the animal was kept, and that as such death was due to force majeure she
is relieved from the duty of returning the bull or paying its value to the appellee. 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.

Issue:
Whether the borrowing of the Bull from the appellee is a commodatum contract and that, for
that reason, as the appellee retained ownership or title to the bull it should suffer its loss due
to force majeure.?

Held:
No, A contract of commodatum 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 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;
ALEJANDRA MINA, ET AL., V. RUPERTA PASCUAL, ET AL.,

G.R. No. L-8321, October 14, 1913

FACTS:

● Francisco Fontanilla bought a lot (120meters x 15meters) in the center of Laoag. He

let his brother, Andres, to build a warehouse on the part lot (14meters x 11meters).

● Francisco and Andres were now dead. The petitioners in this case were recognized
without discussion as Francisco’s heirs. The defendants were claiming that they were
entitled to the warehouse although there’s no basis for their claim.

● Pascual et al. petitioned the court for an authority to sell the warehouse and the lot.
Mina et al. opposed the petition and motion the court to decide first on the question
of ownership before the sale of the property. The Court, still, ordered for the sale of
the property. The warehouse and the lot were sold to Cu Joco.

● The petitioners questioned the decision, claiming that by allowing the defendants to
sell the property, the court decided that Pascual et al were the owners of both land
and warehouse.

● What is essentially pertinent to the case is the fact that the defendant agrees that the
plaintiffs have the ownership, and they themselves only use, of the said lot.

ISSUE:

● Whether or not a contract of commodatum exists.

RULING:

● What is essentially pertinent to the case is the fact that the defendant agrees that the
plaintiffs have the ownership, and they themselves only use, of the said lot. On this
premise, the nullity of the sale of the lot is in all respects quite evident. He who has
only the use of a thing cannot validly sell the thing itself.

● Although both parties may have agreed in their idea of the commodatum, on account
of its not being, as indeed it is not, a question of fact but of law, yet that denomination
given by them to the use of the lot granted by Francisco Fontanilla to his brother,
Andres Fontanilla, is not acceptable.

By the contract of loan, one of the parties delivers to the other,

either anything not perishable, in order that the latter may use
it during the certain period and return it to the former , in
which case it is called commodatum . . . (art. 1740, Civil Code)

● Francisco did not fix any definite period or time during which Andres could have the
use of the lot where the warehouse was built, and so it is that for the past thirty years
the lot has been used by both Andres and his successors in interest. The present
contention of the plaintiffs that Cu Joco, now in possession of the lot, should pay rent
for it at the rate of P5 a month, would destroy the theory of the commodatum sustained
by them, since, according to article 1740, "commodatum is essentially gratuitous”.

● Sale of the lot made by Pascual was annulled.

Producers Bank of the Phil vs CA 115324 February 19, 2003

FACTS:

Sometime 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, the Sterela Marketing and Services (“Sterela” for brevity). Specifically, Sanchez
asked private respondent 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 month’s time. With this, Mrs. Vivies, Sanchez
and a certain Estrella Dumagpi, secretary of Doronilla, went to the bank to open an account
with Mrs. Vives and Sanchez as signatories. A passbook was then issued to Mrs. Vives.
Subsequently, private respondent learned that part of the money was withdrawn without
presentment of the passbook as it was his wife got hold of such. Mrs. Vives could not also
withdraw said remaining amount because it had to answer for some postdated checks issued
by Doronilla who opened a current account for Sterela and authorized the bank to debit
savings.

Private respondent referred the matter to a lawyer, who made a written demand upon
Doronilla for the return of his client’s money. Doronilla issued another check for P212,000.00
in private respondent’s favor but the check was again dishonored for insufficiency of funds.

Private respondent instituted an action for recovery of sum of money in the Regional Trial
Court (RTC) in Pasig, Metro Manila against Doronilla, Sanchez, Dumagpi and petitioner. The
RTC ruled in favor of the private respondent which was also affirmed in toto by the CA. Hence
this petition.

ISSUE: WON THE TRANSACTION BETWEEN THE DORONILLA AND RESPONDENT VIVES WAS
ONE OF SIMPLE LOAN.

HELD: NO.

A circumspect examination of the records reveals that the transaction between them was a
commodatum. Article 1933 of the Civil Code distinguishes between the two kinds of loans in
this wise:

By the contract of loan, one of the parties delivers to another, either something not
consumable so that the latter may use the same for a certain time and return it, in which case
the contract is called a commodatum; or money or other consumable thing, upon the condition
that the same amount of the same kind and quality shall be paid, in which case the contract
is simply called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.

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. In case of doubt, the contemporaneous and
subsequent acts of the parties shall be considered in such determination.
CATHOlIC VICAR vs. COURT OF APPEALS, G.R. No. 80294-95 September 21, 1988

Facts:
Filed with the Court of First Instance of Baguio Benguet on September 5, 1962 an application
for registration of title over Lots 1, 2, 3, and 4 in Psu-194357, situated at Poblacion Central,
La Trinidad, Benguet. the Heirs of Juan Valdez and the Heirs of Egmidio Octaviano filed their
Answer/Opposition on Lots Nos. 2 and 3, respectively, asserting ownership and title thereto.
After trial on the merits, the land registration court promulgated its Decision, dated November
17, 1965, confirming the registrable title of VICAR to Lots 1, 2, 3, and 4. the Respondent
appealed the decision of the land registration court to the then Court of Appeals, reversing
the decision of the land registration court and dismissing the VICAR’s application as to Lots 2
and 3, the lots claimed by the two sets of oppositors in the land registration case. for The
Court of Appeals found that petitioner did not meet the requirement of 30 years possession
for acquisitive prescription over Lots 2 and 3. Neither did it satisfy the requirement of 10
years possession for ordinary acquisitive prescription because of the absence of just title. The
appellate court did not believe the findings of the trial court that Lot 2 was acquired from Juan
Valdez by purchase and Lot 3 was acquired also by purchase from Egmidio Octaviano by
petitioner Vicar because there was absolutely no documentary evidence to support the same
and the alleged purchases were never mentioned in the application for registration.

By the very admission of petitioner Vicar, Lots 2 and 3 were owned by Valdez and
Octaviano. Both Valdez and Octaviano had Free Patent Application for those lots
since 1906. The predecessors of private respondents, not petitioner Vicar, were in
possession of the questioned lots since 1906.

There is evidence that petitioner Vicar occupied Lots 1 and 4, which are not in
question, but not Lots 2 and 3, because the buildings standing thereon were only
constructed after liberation in 1945. Petitioner Vicar only declared Lots 2 and 3 for
taxation purposes in 1951. The improvements oil Lots 1, 2, 3, 4 were paid for by the
Bishop but said Bishop was appointed only in 1947, the church was constructed only
in 1951 and the new convent only 2 years before the trial in 1963.

When petitioner Vicar was notified of the oppositor’s claims, the parish priest offered to buy
the lot from Fructuoso Valdez. Lots 2 and 3 were surveyed by request of petitioner Vicar only
in 1962.

Issue:
Whether the ownership of a property maybe transfer to the bailee for failure of the bailor to
demand for the return if it.

Held:
No, The bailees’ failure to return the subject matter of commodatum to the bailor did not
mean adverse possession on the part of the borrower. The bailee held in trust the property
subject matter of commodatum. The adverse claim of petitioner came only in 1951 when it
declared the lots for taxation purposes. The action of petitioner Vicar by such adverse claim
could not ripen into title by way of ordinary acquisitive prescription because of the absence
of just title. The Court of Appeals found that the predecessors-in-interest and private
respondents were possessors under claim of ownership in good faith from 1906; that
petitioner Vicar was only a bailee in commodatum; and that the adverse claim and repudiation
of trust came only in 1951.