Question: In what circumstances can passive be used in place of a roll?
Answer: Commonly when the creature is unaware of the situation or event. For example you may walk into the living room of your house, a place you do not commonly search; your passive perception may be called upon to notice something slightly out of place. Or let’s say you walking past a few unruly horses, your passive Beast Lore skill may allow you to notice one of the mares is in heat and the male horses are struggling to loosen their bonds.
In essence a passive value is used when you are not
ACTIVELY using your skill, hearing things in passing, noticing a strange smell in the air, and so on.