Jose Bagtas borrowed three bulls from the Bureau of Animal Industry for breeding purposes for one year. The contract was renewed for one more year for one bull, while the other two were to be returned. Bagtas failed to return or pay for the bulls. He argued he should not be liable since one bull was accidentally killed by rebels. The Supreme Court ruled that Bagtas was not relieved of his obligation. As the borrower paid a breeding fee, the contract was considered a lease rather than a free loan. As a lessee in bad faith after the contract expired, Bagtas was responsible for the bulls. Even if it was a free loan, the Civil Code states that the bailee is liable for loss
Jose Bagtas borrowed three bulls from the Bureau of Animal Industry for breeding purposes for one year. The contract was renewed for one more year for one bull, while the other two were to be returned. Bagtas failed to return or pay for the bulls. He argued he should not be liable since one bull was accidentally killed by rebels. The Supreme Court ruled that Bagtas was not relieved of his obligation. As the borrower paid a breeding fee, the contract was considered a lease rather than a free loan. As a lessee in bad faith after the contract expired, Bagtas was responsible for the bulls. Even if it was a free loan, the Civil Code states that the bailee is liable for loss
Jose Bagtas borrowed three bulls from the Bureau of Animal Industry for breeding purposes for one year. The contract was renewed for one more year for one bull, while the other two were to be returned. Bagtas failed to return or pay for the bulls. He argued he should not be liable since one bull was accidentally killed by rebels. The Supreme Court ruled that Bagtas was not relieved of his obligation. As the borrower paid a breeding fee, the contract was considered a lease rather than a free loan. As a lessee in bad faith after the contract expired, Bagtas was responsible for the bulls. Even if it was a free loan, the Civil Code states that the bailee is liable for loss
Jose Bagtas borrowed three bulls from the Bureau of Animal Industry for breeding purposes for one year. The contract was renewed for one more year for one bull, while the other two were to be returned. Bagtas failed to return or pay for the bulls. He argued he should not be liable since one bull was accidentally killed by rebels. The Supreme Court ruled that Bagtas was not relieved of his obligation. As the borrower paid a breeding fee, the contract was considered a lease rather than a free loan. As a lessee in bad faith after the contract expired, Bagtas was responsible for the bulls. Even if it was a free loan, the Civil Code states that the bailee is liable for loss
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REPUBLIC vs.
BAGTAS
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 for breeding purposes subject to a government charge of breeding fee of 10% of the book value of the bulls. Upon the expiration 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 and requested the return of the other two. Bagtas wrote to the Director of Animal Industry that he would pay the value of the three bulls and later reiterated his desire to buy them at a value with a deduction of yearly depreciation to be approved by the Auditor General. 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 which Bagtas failed to pay or to return. An action against him was commenced, praying that he be ordered to return the three bulls loaned to him or to pay their book value with interests, and costs; and that other just and equitable relief be granted. Bagtas answered that because of the bad peace and order situation in Cagayan Valley, particularly in the barrio of Baggao, and of the pending appeal he had taken to the Secretary of Agriculture and Natural Resources and the President of the Philippines from the refusal by the Director of Animal Industry to deduct from the book value of the bulls corresponding yearly depreciation of 8% from the date of acquisition, to which depreciation the Auditor General did not object, he could not return the animals nor pay their value and prayed for the dismissal of the complaint. The appellant contends that the Sahiniwal bull was accidentally killed during a raid by the Huks 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 the returning the bull or paying its value to the appellee.
ISSUE: Whether or not Bagtas is relieved from the duty of returning or paying for the value of the bull.
SC RULING: Bagtas is not relieved of his obligation. The loan by the appellee to the late defendant Bagtas of the three bulls for breeding purposes for a period of one year, 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. 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 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 the Civil Code provides that a bailee in a contract of commodatum is liable for loss of the thing, even if it should be through a fortuitous event: xxx 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.
