Credit Transactions, First Semestre (AY 2014 2015), Saturday (7PM 9PM), Atty. Crisostomo A.

Uribe
Bentez, Montilla, San Andres, Sia, Uyson
1

Republic of the Philippines v Jose V. Bagtas and Felicidad M. Bagtas,
GR L-17474, 25 October 1962
En banc, Padilla, J.

Facts:

(1) On 8 May 1948, Jose borrowed from the Republic, through the Bureau of Animal
Industry, three bulls for a period of one year. This was for breeding purposes subject
to a government charge, which was the breeding fee of 10% of the book value of the
bulls. The three bulls and their book values are as follows:

(a) Red Sindhi PhP 1,176.46;

(b) Bhagnari PhP 1,320.56; and

(c) Sahiniwal PhP 744.46

(2) Upon the expiration of the contract on 7 May 1949, Jose asked Republic for a
renewal of the same for another year. The Republic, through the Secretary of Agricul-
ture and Natural Resources, however, only approved the renewal of only one bull for
another year. It also requested the return of the other two bulls.

(3) On 25 March 1950, Jose wrote to the Director of Animal Industry that he would pay
the value of the three bulls. Moreover, he expressed his desire to buy them at lower
value. On 19 October 1950, the Director advised him that the books value of the bulls
cannot be reduced and the they either be returned or their book value paid not later
than 31 October 1950. Subsequently, Jose failed to either return or pay them.

(4) On 20 December 1950, the Republic commenced an action against Jose in the CFI
of Manila ordering the return of the bulls and the payment of their book value. On 5
July 1951, however, Jose replied that he could neither return the bulls nor pay their
book value due to the bad peace and order situation in Cagayan Valley. Later on, it
was found out that the Sahiniwal died from a gunshot wound inflicted during a Huk
raid sometime in November 1953.

Issue:

Whether or not Jose is liable for the death of the Sahiniwal.

Ruling:

Yes, Jose is liable for the death of the Sahiniwal. This liability is based on Article 1942 of
the New Civil Code (NCC) regarding the obligations of the bailee in commodatum.

Ratio:

(1) The bailee in commodatum is liable for the loss of the things, even if it should be
through a fortuitous event if:

(a) he keeps it longer than the period stipulated (Article 1942(2), NCC); and

Credit Transactions, First Semestre (AY 2014 2015), Saturday (7PM 9PM), Atty. Crisostomo A. Uribe
Bentez, Montilla, San Andres, Sia, Uyson
2

(b) 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.

(2) The original period of loan was from 8 May 1948 to 7 May 1949. The loan of one bull
was renewed for another period of one year to end on 8 May 1950. Nevertheless,
Jose kept and used the bull until November 1953 when it was killed by stray bullets
during a Huk raid.

(3) Furthermore, when Jose borrowed the three bulls, each of them had an appraised
value, to wit:

(a) Red Sindhi PhP 1,176.46;

(b) Bhagnari PhP 1,320.56; and

(c) Sahiniwal PhP 744.46.

Likewise, the contract between the Republic and Jose did not stipulate that he would
be exempt from liability in case of loss of the bull due to fortuitous event.