CREDIT TRANSACTION CASEDIGEST/ PAJUYO VS. COURT OF APPEALS/ G. R. NO. 146364/ 3 JUNE 2004/ 430 SCRA 492

CREDIT TRANSACTION CASE DIGEST

PAJUYO VS. COURT OF APPEALS

G. R. NO. 146364, 3 JUNE 2004, 430 SCRA 492

TOPIC/DOCTRINE

An essential feature of commodatum is that it is gratuitous, while another feature is that the use of the thing belonging to another is for a certain period; 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; Precarium is a kind of commodatum.

FACTS

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 Pajuyo’s demand.

In September 1994, Pajuyo informed Guevarra of his need of the house and demanded that Guevarra vacate the house. Guevarra refused. 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.

ISSUE

Whether the contract is that of a commudatum.

Whether Guiverra should be ejected from the property.

RULING

            On the first issue, court ruled in the negative.

            The court held that an essential feature of commodatum is that it is gratuitous, while another feature is that the use of the thing belonging to another is for a certain period; 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; Precarium is a kind of commodatum.

            Here, the court held that 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.

            On the second issue of ejectment, the court held in the affirmative.

The court ruled here that the plaintiff allows the defendant to use his property by tolerance without any contract, the defendant is necessarily bound by an implied promise that he will vacate on demand, failing which, an action for unlawful detainer will lie.60 The defendant’s refusal to comply with the demand makes his continued possession of the property unlawful.

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