7. PAJUYO VS CA AND GUEVARRA  RTC: Upheld the agreement and was in fact a landlord-tenant relationship.
It rejected
GR NO. 146364
JUNE 3, 2004
BY: Ryan
TOPIC: COMMODATUM
PETITIONERS: COLITO PAJUYO (WINNER)
PRIVATE RESPONDENT: EDDIE GUEVARRA (LOSER) and CA
PONENTE: CARPIO, J.
SUMMARY: In a Kasunduan, Pajuyo allowed Guevarra to live in his premises rent-free
provided that Guevarra maintain it well. Guevarra agreed leave if he broke such promise or
on Pajuyo’s demand. Pajuyo demanded him to leave but refused because Pajuyo was a
squatter himself and did not own the land as it was to be used for housing. Guevarra also
claimed he had better rights over said land. There was a dispute if the agreement was that
of a commodatum. SC held that it was not. Although Guevarra lived rent-free, he had to
maintain. The contract was not gratuitous as there were conditions. The agreement was
like a landlord-tenant relationship.
DOCTRINE: In a contract of commodatum, one of the parties delivers to another
something not consumable so that the latter may use the same for a certain time and
return it. An essential feature of commodatum is that it is gratuitous. Another feature is
that the use of the thing belonging to another is for a certain period. Thus, the bailor
cannot demand the return of the thing loaned until after expiration of the period
stipulated, or after accomplishment of the use for which the commodatum is constituted.
If the bailor should have urgent need of the thing, he may demand its return for temporary
use. 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. Under
the Civil Code, precarium is a kind of commodatum.
FACTS:
 Colito Pajuyo paid P400 to a certain Pedro Perez over the rights over a 250m2 lot in
QC. Pajuyo built a house where he and his family lived for more than 6 years.
 Pajuyo and Guevarra executed a Kasunduan (agreement) wherein Pajuyo, as owner,
allowed Guevarra to live in the house provided that Guevarra would maintain the
cleanliness of said house which Guevarra promised to do so. He would vacate the
premises upon Pajuyo’s demand.
 Pajuyo filed an ejectment case against Guevarra with the MTC. Guevarra countered
that Pajuyo had no valid title/right to possess the lot as it was within 150 hectares as
covered by Proclamation No. 137 for socialized housing. Guevarra asserts that from
1985 to 1994, Pajuyo never talked to him and insists that neither of them had a valid
title over the lot
 MTC ruled in Pajuyo’s favor and ordered Guevarra to 1) vacate the house; 2) pay P300
for compensation of using said premises and other fees. Guevarra went to the RTC
and affirmed the MTC decision in toto.
 The CA reversed the RTC decision.Pajuyo filed an MR but was denied.
 MTC: The subject of the agreement was the house and not the lot. Pajuyo only
allowed Guevarra to live in it hence Guevarra’s refusal to vacate upon demand made
his possession illegal.
Guevarra’s claim of a better right under said Proc. No. 137. Under an ejectment suit, the RTC
had no powers to decide on his rights. The issue was possession, not ownership.
 CA: Both are squatters as they illegally occupied the lot (in pari delicto). Perez, whom Pajuyo
bought the lot from, was a squatter. The agreement had no legal effect, however it created a
legal tie. The agreement was not a lease contract but a commodatum as no price was fixed.
ISSUE: WON the Kasunduan was a commodatum
HELD/RATIO: NO.
 Guevarra admitted to Pajuyo’s prior possession of the lot as evidence in the agreement.
Pajuyo permitted Guevarra to live in the premises rent-free but Guevarra’s obligation was its
maintenance. He promised to vacate it on Pajuyo’s demand but he broke his promise and
refused to vacate. While Pajuyo allowed Guevarra to use the lot w/o any contract, there was
an implied promise by Guevarra to vacate on demand. His refusal to do so makes his
continued possession unlawful. His status is that of a tenant whose lease has expired.
 This is an unlawful detainer case. An unlawful detainer involves the withholding by a person
from another of the possession of the real property in which the latter is entitled after
expiration/termination of the occupant’s rights to possess under an expressed/implied
contract.
 In a contract of commodatum, one of the parties delivers to another something not
consumable so that the latter may use the same for a certain time and return it. An
essential feature of commodatum is that it is gratuitous. Another feature of commodatum
is that the use of the thing belonging to another is for a certain period. Thus, the bailor
cannot demand the return of the thing loaned until after expiration of the period
stipulated, or after accomplishment of the use for which the commodatum is constituted. If
the bailor should have urgent need of the thing, he may demand its return for temporary
use. 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. Under the Civil
Code, precarium is a kind of commodatum.
 In this case, the agreement was not gratuitous. While no rent was to be paid, Guevarra had
to maintain it. The agreement was a contract hence the effects are not of a commodatum.
Such relationship based on tolerance is like landlord-tenant relationship.
 Even if this was a commodatum, Guevarra as bailee had to return possession of the land to
Pajuyo as bailor. The obligation to deliver/return a thing attaches to contracts such as a
commodatum. Even though both are squatter, Guevarra freely entered into the Kasunduan
and benefitted from it thus binding him.
 Pajuyo’s termination of permission ended Guevarra’s right to possess. Pajuyo had actual
possession as Guevarra sought his permission. Control over it was with Pajuyo. Even in
Pajuyo’s absence, this did not affect his possession. Once can possess not only in the physical
sense, but also by the fact that a thing is subject to the action of one’s will.
DISPOSITIVE PORTION: WHEREFORE, we GRANT the petition. The Decision dated 21 June 2000
and Resolution dated 14 December 2000 of the Court of Appeals in CA-G.R. SP No. 43129 are SET
ASIDE. The Decision dated 11 November 1996 of the Regional Trial Court of Quezon City, Branch
81 in Civil Case No. Q-96-26943, affirming the Decision dated 15 December 1995 of the
Metropolitan Trial Court of Quezon City, Branch 31 in Civil Case No. 12432, is REINSTATED with
MODIFICATION. The award of attorneys fees is deleted. No costs.