Republic vs Bagtas (Credit Transactions-commodatum)

Republic vs Bagtas

6 SCRA 262

Facts: 

Bagtas borrowed three bulls from the Bureau of Animal Industry for one year for breeding purposes subject to payment of breeding fee of 10% of book value of the bull. Upon expiration, Bagtas asked for renewal. The renewal was granted only to one bull. Bagtas offered to buy the bulls at its book value less depreciation but the Bureau refused. The Bureau said that Bagtas should either return or buy it at book value. Bagtas proved that he already returned two of the bulls, and the other bull died during a Huk raid, hence, obligation already extinguished. He claims that the contract is a commodatum hence, loss through fortuitous event should be borne by the owner.

 

Issue: 

WON Bagtas is liable for the death of the bull.

Held: 

Yes. Commodatum is essentially gratuitous. However, in this case, there is a 10% charge. If this is considered compensation, then the case at bar is a lease. Lessee is liable as possessor in bad faith because the period already lapsed.

Even if this is a commodatum, Bagtas is still liable because the fortuitous event happened when he held the bull and the period stipulated already expired and he is liable because the thing loaned was delivered with appraisal of value and there was no contrary stipulation regarding his liability in case there is a fortuitous event.