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CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN PROVINCE, petitioner,
vs.
COURT OF APPEALS, HEIRS OF EGMIDIO OCTAVIANO AND JUAN
VALDEZ, respondents.
G.R. No. 80294-95 September 21, 1988
FACTS:
VICAR filed with the RTC an application for registration of title over Lots 1, 2, 3 and
4. Heirs of Octaviano and Valdez filed their opposition thereto. RTC ruled in favor or
VICAR.
Court of Appeals reversed the registration of Lots 2 and 3 claimed by the heirsoppositors and found out that:
VICAR borrowed respondents house after the church and the convent was
destroyed. Respondent never asked for the return of the house, but when they
allowed its free use, they became bailors in commodatumand the VICAR the bailee.
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 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.
Heirs filed for recovery of possession of Lots 2 and 3.
ISSUE:
Whether or not the decisions of the Court of Appeals and the Supreme Court
touching on the ownership of Lot 2 and 3 which in effect declared the Heirs the
owners of the land constitute res judicata.
HELD:
YES. SC found no reason to disregard or reverse the ruling of the Court of Appeals in
CA-G.R. No. 38830-R. Its findings of fact have become incontestible. This Court
declined to review said decision, thereby in effect, affirming it. It has become final
and executory a long time ago.
Respondent appellate court did not commit any reversible error, much less grave
abuse of discretion, when it held that the Decision of the Court of Appeals in CA-G.R.
No. 38830-R is governing, under the principle of res judicata, hence the rule, in the
present cases CA-G.R. No. 05148 and CA-G.R. No. 05149. The facts as supported by
evidence established in that decision may no longer be altered.

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TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and TERESITA
SANTOS, petitioners,
vs.
THE CITY FISCAL OF MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY FISCAL
FELIZARDO N. LOTA and CLEMENT DAVID, respondents.
G.R. No. L-60033 April 4, 1984
FACTS:
David, together with his sister, Denise Kuhne, invested with the Nation Savings and
Loan Association the sum of P1,145,546.20 on time deposits covered by Bankers
Acceptances and Certificates of Time Deposits and the sum of P13,531.94 on
savings account deposits covered by passbook nos. 6-632 and 29-742, or a total of
P1,159,078.14. It appears further that private respondent David, together with his
sister, made investments in the aforesaid bank in the amount of US$75,000.00.
When the aforesaid bank was placed under receivership on March 21, 1981,
petitioners Guingona and Martin, upon the request of private respondent David,
assumed the obligation of the bank to private respondent David by executing on
June 17, 1981 a joint promissory note in favor of private respondent acknowledging
an indebtedness of Pl,336,614.02 and US$75,000.00. This promissory note was
based on the statement of account as of June 30, 1981 prepared by the private
respondent. The amount of indebtedness assumed appears to be bigger than the
original claim because of the added interest and the inclusion of other deposits of
private respondent's sister in the amount of P116,613.20.
Thereafter, or on July 17, 1981, petitioners Guingona and Martin agreed to divide
the said indebtedness, and petitioner Guingona executed another promissory note
antedated to June 17, 1981 whereby he personally acknowledged an indebtedness
of P668,307.01 (1/2 of P1,336,614.02) and US$37,500.00 (1/2 of US$75,000.00) in
favor of private respondent.. The aforesaid promissory notes were executed as a
result of deposits made by Clement David and Denise Kuhne with the Nation
Savings and Loan Association.
Thereafter, David charged petitioners with Estafa and violation of Central Bank
Circular No. 364 and related Central Bank regulations on foreign exchange
transactions.
ISSUE:
Whether or not public respondents acted without jurisdiction when they
investigated the charges (estafa and violation of CB Circular No. 364 and related
regulations regarding foreign exchange transactions) subject matter of I.S. No. 8131938.
HELD:
YES. When private respondent David invested his money on nine. and savings
deposits with the aforesaid bank, the contract that was perfected was a contract of
simple loan or mutuum and not a contract of deposit. Thus, Article 1980 of the New
Civil Code provides that:
Article 1980. Fixed, savings, and current deposits of-money in banks
and similar institutions shall be governed by the provisions concerning
simple loan.
Bank deposits are in the nature of irregular deposits. They are really 'loans because
they earn interest. All kinds of bank deposits, whether fixed, savings, or current are
to be treated as loans and are to be covered by the law on loans.
Hence, the relationship between the private respondent and the Nation Savings and
Loan Association is that of creditor and debtor; consequently, the ownership of the
amount deposited was transmitted to the Bank upon the perfection of the contract
and it can make use of the amount deposited for its banking operations, such as to

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pay interests on deposits and to pay withdrawals. While the Bank has the obligation
to return the amount deposited, it has, however, no obligation to return or deliver
the same money that was deposited. And, the failure of the Bank to return the
amount deposited will not constitute estafa through misappropriation punishable
under Article 315, par. l(b) of the Revised Penal Code, but it will only give rise to civil
liability over which the public respondents have no- jurisdiction.
THERE IS NOVATION
But even granting that the failure of the bank to pay the time and savings deposits
of private respondent David would constitute a violation of paragraph 1(b) of Article
315 of the Revised Penal Code, nevertheless any incipient criminal liability was
deemed avoided, because when the aforesaid bank was placed under receivership
by the Central Bank, petitioners Guingona and Martin assumed the obligation of the
bank to private respondent David, thereby resulting in the novation of the original
contractual obligation arising from deposit into a contract of loan and converting the
original trust relation between the bank and private respondent David into an
ordinary debtor-creditor relation between the petitioners and private respondent.
Consequently, the failure of the bank or petitioners Guingona and Martin to pay the
deposits of private respondent would not constitute a breach of trust but would
merely be a failure to pay the obligation as a debtor.
Moreover, while it is true that novation does not extinguish criminal liability, it may
however, prevent the rise of criminal liability as long as it occurs prior to the filing of
the criminal information in court.
In the case at bar, there is no dispute that petitioners Guingona and Martin
executed a promissory note on June 17, 1981 assuming the obligation of the bank to
private respondent David; while the criminal complaint for estafa was filed on
December 23, 1981 with the Office of the City Fiscal. Hence, it is clear that novation
occurred long before the filing of the criminal complaint with the Office of the City
Fiscal.
Consequently, as aforestated, any incipient criminal liability would be avoided but
there will still be a civil liability on the part of petitioners Guingona and Martin to
pay the assumed obligation.

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REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,
vs.
JOSE V. BAGTAS, defendant,
FELICIDAD M. BAGTAS, Administratrix of the Intestate Estate left by the
late Jose V. Bagtas, petitioner-appellant.
G.R. No. L-17474

October 25, 1962

FACTS:
On 8 May 1948 Jose V. Bagtas borrowed from the Republic of the Philippines through
the Bureau of Animal Industry three bulls for a period of one year from 8 May 1948
to 7 May 1949 for breeding purposes 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,
the Secretary of Agriculture and Natural Resources 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. On 25 March 1950 Jose V. Bagtas wrote to the Director of
Animal Industry that he would pay the value of the three bulls. On 17 October 1950
he reiterated his desire to buy them at a value with a deduction of yearly
depreciation to be approved by the Auditor General. On 19 October 1950 the
Director of Animal Industry advised him that the book value of the three bulls could
not be reduced and that they either be returned or their book value paid not later
than 31 October 1950. Jose V. Bagtas failed to pay the book value of the three bulls
or to return them.

On 20 December 1950 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 in (civil No. 12818).
RTC (CFI) ruled in favor of the Republic ordering Bagtas to pay the total value of the
three bulls plus the breeding fees. Republic moved for a writ of execution which was
granted.
Bagtas returned the two bulls during the pendency of the case. However, Bagtas
stated that the third bull died from gunshot wound inflicted during a Huk raid on
Hacienda Felicidad Intal, 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. He prayed
that the writ of execution be quashed and that a writ of preliminary injunction be
issued.
ISSUE:
Whether or not Bagtas is relieved from returning the bull or paying is value due to
force majeure.
HELD:
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

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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. 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;
The original period of the 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. But the
appellant kept and used the bull until November 1953 when during a Huk raid it was
killed by stray bullets. Furthermore, when lent and delivered to Bagtas, the bulls had
each an appraised book value. It was not stipulated that in case of loss of the bull
due to fortuitous event Bagtas would be exempt from liability.

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CHERIE PALILEO, plaintiff-appellee,
vs.
BEATRIZ COSIO, defendant-appellant.
G.R. No. L-7667
November 28, 1955
FACTS:
On December 18, 1951, plaintiff obtained from defendant a loan in the sum of
P12,000 subject to the following conditions: (a) that plaintiff shall pay to defendant
an interest in the amount of P250 a month; (b) that defendant shall deduct from the
loan certain obligations of plaintiff to third persons amounting to P4,550, plus the
sum of P250 as interest for the first month; and (c) that after making the above
deductions, defendant shall deliver to plaintiff only the balance of the loan of
P12,000.
Pursuant to their agreement, plaintiff paid to defendant as interest on the loan a
total of P2,250.00 corresponding to nine months from December 18, 1951, on the
basis of P250.00 a month, which is more than the maximum interest authorized by
law. To secure the payment of the aforesaid loan, defendant required plaintiff to sign
a document known as "Conditional Sale of Residential Building", purporting to
convey to defendant, with right to repurchase, a two-story building of strong
materials belonging to plaintiff. This document did not express the true intention of
the parties which was merely to place said property as security for the payment of
the loan.
After the execution of the aforesaid document, defendant insured the building
against fire with the Associated Insurance & Surety Co., Inc. for the sum of P15,000,
the insurance policy having been issued in the name of defendant. The building was
partly destroyed by fire and, after proper demand, defendant collected from the
insurance company an indemnity of P13,107.00. Plaintiff demanded from defendant
that she be credited with the necessary amount to pay her obligation out of the
insurance proceeds but defendant refused to do so. And on the strength of these
facts, the court rendered decision the dispositive part of which reads as follows:
Wherefore, judgment is hereby rendered declaring the transaction had
between plaintiff and defendant, as shown in Exhibit A, an equitable
mortgage to secure the payment of the sum of P12,000 loaned by the
defendant to plaintiff; ordering the defendant to credit the sum of P13,107
received by the defendant from the Associated Insurance & surety Co., Inc. to
the payment of plaintiff's obligation in the sum of P12,000.00 as stated in the
complaint, thus considering the agreement of December 18, 1951 between
the herein plaintiff and defendant completely paid and leaving still a balance
in the sum of P1,107 from the insurance collected by defendant; that as
plaintiff had paid to the defendant the sum of P2,250.00 for nine months as
interest on the sum of P12,000 loaned to plaintiff and the legal interest
allowed by law in this transaction does not exceed 12 per cent per annum, or
the sum of P1,440 for one year, so the herein plaintiff and overpaid the sum
of P810 to the defendant, which this Court hereby likewise orders the said
defendant to refund to herein plaintiff, plus the balance of P1,107
representing the difference of the sum loan of P12,000 and the collected
insurance of P13,107 from the insurance company abovementioned to which
the herein plaintiff is entitled to receive, and to pay the costs.
ISSUE:
Whether or not the trial court is justified in considering the obligation of plaintiff
fully compensated by the insurance amount and in ordering defendant to refund to
plaintiff the sum of P1,107 representing the difference of the loan of P12,000 and

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the sum of P13,107 collected by said defendant from the insurance company
notwithstanding the fact that it was not proven that the insurance was taken for the
benefit of the mortgagor?
HELD:
NO. Where a mortgagee, independently of the mortgagor, insures the mortgaged
property in his own name and for his own interest, he is entitled to the insurance
proceeds in case of loss, but in such case, he is not allowed to retain his claim
against the mortgagor, but is passed by subrogation to the insurer to the extent of
the money paid.
Considering the foregoing rules, it would appear that the lower court erred in
declaring that the proceeds of the insurance taken out by the defendant on the
property mortgaged inured to the benefit of the plaintiff and in ordering said
defendant to deliver to the plaintiff the difference between her indebtedness and
the amount of insurance received by the defendant, for, in the light of the majority
rule we have above enunciated, the correct solution should be that the proceeds of
the insurance should be delivered to the defendant but that her claim against the
plaintiff should be considered assigned to the insurance company who is deemed
subrogated to the rights of the defendant to the extent of the money paid as
indemnity.
Consistent with the foregoing pronouncement, we therefore modify the judgment of
the lower court as follows:(1) the transaction had between the plaintiff and
defendant as shown in Exhibit A is merely an equitable mortgage intended to secure
the payment of the loan of P12,000;(2) that the proceeds of the insurance
amounting to P13,107.00 was properly collected by defendant who is not required
to account for it to the plaintiff; (3) that the collection of said insurance proceeds
shall not be deemed to have compensated the obligation of the plaintiff to the
defendant, but bars the latter from claiming its payment from the former; and (4)
defendant shall pay to the plaintiff the sum of P810.00 representing the
overpayment made by plaintiff by way of interest on the loan. No pronouncement as
to costs.

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NICANOR B. PAGKALINAWAN, Supervising Agent, National Bureau of
Investigation, East Visayan District Office, Cebu City, Petitioner, v. HON.
AMADOR E. GOMEZ, in his capacity as Presiding Judge, Branch II, Court of
First Instance of Cebu, Cebu City, and NORBERTO L. DAYRIT, Respondents.
[G.R. No. L-22585. December 18, 1967.]

FACTS:
Respondent Judge, the Hon. Amador E. Gomez, acting on a complaint for replevin
filed by the other respondent Norberto L. Dayrit directed petitioner, Nicanor B.
Pagkalinawan, a supervising agent of the National Bureau of Investigation to turn
over to the Sheriff of Cebu City an automobile which was seized under a search
warrant issued by the Court of First Instance of Manila, the Hon. Guillermo Santos
presiding, as a subject of the offense of theft or as stolen property.

ISSUE:
Whether a court of first instance of one district in a replevin proceeding may ignore
a search warrant issued by another court of first instance.

HELD:
No. The moment a court of first instance has been informed through the filing of an
appropriate pleading that a search warrant has been issued by another court of first
instance, it cannot, even if the literal language of the Rules of Court 7 yield a
contrary impression which in this case demonstrated the good faith of respondent
Judge for acting as he did, require a sheriff or any proper officer of the Court to take
the property subject of the replevin action if theretofore it came into the custody of
another public officer by virtue of a search warrant. Only the court of first instance
that issued such a search warrant may order its release. Any other view would be
subversive of a doctrine that has been steadfastly adhered to, the main purpose of
which is to assure stability and consistency in judicial actuations and to avoid
confusion that may otherwise ensue if courts of coordinate jurisdiction are
permitted to interfere with each others lawful orders.

No court has power to interfere by injunction with the judgments or decrees of a

court of concurrent or coordinate jurisdiction having equal power to grant the relief
sought by injunction.