Facts:
This case
originally emanated from a decision of the then CFI denying respondents'
application for registration. Applicants' claim is anchored on their possessory
information title coupled with their continuous, adverse and public possession
over the land in question. An examination of the possessory information title
shows that the description and the area of the land stated therein
substantially coincides with the land applied for and that said possessory
information title had been regularly issued having been acquired by applicants'
predecessor, Domingo Baloy, under the provisions of the Spanish Mortgage Law.
Applicants presented their tax declaration on said lands on April 8, 1965.
The Director
of Lands opposed the registration alleging that this land had become public
land thru the operation of Act 627 of the Philippine Commission. On November
26, 1902 pursuant to the executive order of the President of the U.S., the area
was declared within the U.S. Naval Reservation.
Issues:
I. Respondent
court erred in holding that to bar private respondents from asserting any right
under their possessory information title there is need for a court order to
that effect.
II. Respondent
court erred in not holding that private respondents' rights by virtue of their
possessory information title was lost by prescription.
III.
Respondent court erred in concluding that applicants have registerable title.
Held:
No error was committed by the Court of Appeals when it ruled that the
transaction between private respondent and Doronilla was a commodatum and not a
mutuum. A circumspect examination of the records reveals that the transaction
between them was a commodatum. Article 1933 of the Civil Code distinguishes
between the two kinds of loans in this wise:
By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a certain time
and return it, in which case the contract is called a commodatum; or money or
other consumable thing, upon the condition that the same amount of the same
kind and quality shall be paid, in which case the contract is simply called a
loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing loaned,
while in simple loan, ownership passes to the borrower.
The foregoing
provision seems to imply that if the subject of the contract is a consumable
thing, such as money, the contract would be a mutuum. However, there are some
instances where a commodatum may have for its object a consumable thing.
Article 1936 of the Civil Code provides:
Consumable goods may be the subject of commodatum if the purpose of the
contract is not the consumption of the object, as when it is merely for
exhibition.
Thus, if
consumable goods are loaned only for purposes of exhibition, or when the
intention of the parties is to lend consumable goods and to have the very same
goods returned at the end of the period agreed upon, the loan is a commodatum
and not a mutuum.
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