Commodatum, Simple Loan/Mutuum, Deposit

COMMODATUM Object: ! !

 Non-consumable,  Non-consumable, either movable movable or immovable immovable May be consumable if purpose is not for consumption (exhibition)

Return of the thing: !

Use of the thing: !

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May use the thing, but not its fruits (a stipulation to make use of the fruits is valid) Cannot lend or lease the object to a third person (unless otherwise stipulated) Members of household may use the thing unless otherwise stipulated or unless the nature of the thing forbids such use.

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Expenses: !

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Bailee shall pay ORDINARY expenses for USE and PRESERVATION Bailor shall refund the EXTRAORDINARY EXTRAORDINARY expenses for PRESERVATION, during the contract, provided  the bailee notifies the bailor before incurring them, except when urgent  that a reply cannot be awaited due to the danger EXTRAORDINARY expenses arising from USE, even though  bailee acted without without fault, shall shall be borne EQUALLY EQUALLY by both of them (unless otherwise stipulated) Bailor cannot exempt himself from paying by abandoning the thing to bailee

Liabilities (Bailee): !

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Liable for loss of the thing even through a fortuitous event, if: a) Used for a different purpose  b) Kept longer than period allowed or after purpose has been accomplished c) Delivered with appraisal of its value d) Lent or leased to a third person e) Chose to save his own thing rather than the thing borrowed Does not answer for deterioration if only due to natural use and without his fault Solidary liability if there are two or more bailees

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Bailor cannot demand return  of the thing until expiration of  period or accomplishmen accomplishmentt of the use, except  if there is an urgent need, he may demand its return or temporary use (contract of commodatum is suspended while thing is in the possession of the  bailor). Bailor may demand return  if bailee commits acts of ingratitude : a) Commits offenses against person/honor/property of the  bailor or his wife/children wife/children under under parental authority authority  b) Imputes to bailor any criminal offense, or any act involving moral turpitude even if proven, except if the crime has been committed against bailee/his wife/children c) Refuses the bailor support when there is legal or moral obligation to do so In a Precarium, bailor may demand the thing at will . There is a Precarium when the period and the use of the loan has not been stipulated, or if the use of the thing is merely tolerated by the owner. Bailee cannot retain the thing , even if by reason of expenses, unless  for damages due to hidden defects o If bailor is aware of a defect/flaw  in the thing loaned, and does not advice  bailee of it, and the bailee suffers damages  by such defect/flaw, bailor is liable for damages.

Important: !

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By this contract, one delivers to another something not consumable so that he may use the same for a certain time and return it. This is a REAL CONTRACT, delivery is needed for perfection It is essentially GRATUITOUS, and if any compensation is to be  paid, the contract contract ceases to be be a commodatum commodatum Bailor need not be owner of the thing, possessory interest is enough Purely personal - Death of either bailor or bailee extinguishes the contract except if there are two or more borrowers, death of one does not extinguish contract (unless otherwise stipulated) Mere failure to ask for return of object does not constitute adverse  possession

LOAN OR FORBEARANCE

SIMPLE LOAN OR MUTUUM

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Object: !

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Money or any other consumable/fungible thing. Real Contract

Payment: ! !

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Payment shall be in PESOS unless otherwise stipulated If there is extraordinary inflation/deflation, value of currency at time of perfection shall be paid If a fungible thing other than money is loaned, another thing of same kind and quality shall be paid even if it should change in value. If it is impossible to deliver the same kind, its value at  perfection shall be paid

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Interest: !

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Must be expressly stipulated in writing  except when it is an indemnity for damages or interest accruing from unpaid interest If exact rate is not mentioned, then legal rate of 6% In the determination of interest, if the loan is payable in kind, its value shall be appraised at the current  price of the products or goods  at the time of payment Interest due and unpaid shall not earn interest (accrued interest), unless there is judicial demand or a stipulation otherwise If interest is paid when there is no stipulation, provisions on solutio indebiti or natural obligations shall be applied

Interest Doctrines: !

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It is only in contracts of loan that interest may be stipulated and demanded Unilateral impositions of interest do not suffice as proof of an agreement to pay interest Escalation clauses cannot solely depend on the will of a creditor. There should always be a reference rate upon which to peg such variable and there must always be de-escalation clause stipulated Sales invoices or slips issued by stores in the usual printed forms without the signature of the obligor do not constitute the express stipulation required Contracts/stipulations intended to circumvent usury law are void

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NOT LOAN OR FORBEARANCE Court has discretion. (ex. awarding of damages due to quasi-delict) Damages: o If liquidated , from judicial or extrajudicial demand . o If not liquidated, runs from first judgment, whether RTC or labor arbiter or other quasi judicial agency 12% if before - July 1, 2013  - 6% if after

From Finality of Judgment until Payment: Legal Interest: 12% if before - July 1, 2013  - 6% if after !

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DEPOSIT

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Object: !

Only movable things except in judicial deposit

Purpose: !

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Constituted from the moment a person receives a thing belonging to another, with the obligation of safely keeping it and of returning the same If safekeeping is not the principal purpose, it is not a deposit It is a real contract perfected by delivery May be constituted either judicially or extrajudicially Extrajudicial deposit is either voluntary or necessary

Obligations of Depositary: !

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Nature of Compensation: !

A gratuitous contract, unless  when there is an agreement for compensation, or when the depositary is engaged in the business of storing goods, or in involuntary deposit, where a property is saved from destruction from a calamity without the knowledge of the owner

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VOLUNTARY DEPOSIT How Constituted: ! !

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Delivery is made by the will of the depositor May also be made by two or more persons each of whom believes himself entitled to the thing deposited with a third person, who shall deliver the thing to whom it belongs; the action to compel depositors to settle their conflicting claims is in the nature of an interpleader May be oral or in writing

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Incapacity Rules: !

If the depositor is incapacitated , the depositary may be compelled to return the thing by the guardian/administrator or by the depositor himself if he acquires capacity. He is also subject to the obligations of a depositary. If he loses his capacity after making the deposit , the thing cannot be returned except to persons who may have administration of his property and rights.

If the depositary is incapacitated , he does not incur the obligations of a depositary, but the depositor may recover  the thing while in the possession of the depositary, or compel the latter to pay him the amount which he may have enriched or benefited himself. However, if a third person in bad faith obtained it, depositor can bring an action to recover.

Keep the thing safely  and return it when required. Whether the deposit is gratuitous will be taken into account in determining the degree of care needed. Thing deposited shall be returned with all its products, accessories and accessions. If holding instruments earning interest, bound to collect such interest when it becomes due, and may take steps necessary to  preserve their value. Not only the interest, but also the capital, must be collected. Does not apply to rent of safety deposit boxes, which are in the nature of a special kind of deposit (bailor and  bailee) When thing is closed and sealed , it must be returned in same condition. If the lock or seal breaks through his fault, he is liable for damages. Fault is presumed unless proof to the contrary. He must keep the secret of the deposit in all cases if the lock or seal  breaks. As regards the value of the thing deposited, statement of depositor shall be accepted when the forcible opening is imputable to the depositary, but courts may pass upon the credibility of the depositor. When it becomes necessary to open a locked box or receptacle , depositary is presumed authorized if the key has been delivered to him or when the instructions of the depositor cannot be executed without opening it. If the thing is lost due to force majeure or government order , and the he receives money or another thing in its place, he shall deliver the sum or other thing to the depositor.

or to assign his right of action against the buyer in case the price has not been paid.

Allowed Acts: !

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Depositary may change the way  of the deposit if he can reasonably presume that the depositor would consent if he knew the facts. Notification to depositor is required before such change and his decision must be awaited unless  delay would cause danger. Depositary may commingle  grant or other same kind/quality articles, in which case the various depositors shall own a  proportionate interest in the mass (unless prohibited from commingling by stipulation) If the depositary has reasonable grounds to believe that the thing has not been lawfully acquired, he may return it to the depositor. Depositary may retain the thing in pledge  until full payment of what may be due him by reason of the deposit.

Return: !

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Restrictions: !

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Cannot deposit the thing  with a third person, unless otherwise stipulated. If allowed, liable for the loss if deposited with a person who is manifestly careless or unfit . The depositary is responsible for the negligence of his employees Cannot use the thing without EXPRESS permission , otherwise he is liable for damages, except  when preservation of the thing requires its use. If there is permission to use the thing, the contract loses the concept of a deposit and becomes a loan or commodatum except  where safekeeping  is still the principal purpose . Cannot demand that depositor prove his ownership , but if he discovers that the thing is stolen and knows who its true owner is, he must advise such owner of the deposit. If owner does not claim within one month, depositary is relieved  of responsibility by returning  the thing to the depositor.

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Obligations of Depositor: !

Liabilities: !

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Depositary is liable for loss through fortuitous event if: a) Stipulated  b) Uses thing without permission c) Delays its return d) Allows others to use it even if he is authorized to use it himself Depositor's heir who in good faith sold the thing not knowing it was deposited shall only be bound to return the price he received

Thing must be returned at the place agreed upon (expenses for transportation borne by the depositor) or in the absence of such, it shall be made where the thing deposited might be, even if it should not be the same place where the deposit was made, provided that there is no malice on the part of the depositary. Thing must be returned upon demand, even though a period has  been fixed, except: a) When it is judicially attached while in depositary's  possession  b) When notified of the opposition of a third person to the return or removal of the thing In these cases, depositary must immediately inform the depositor of the attachment or opposition. Depositary who may have justifiable reasons for not keeping the thing deposited, even before the designated time, may return it to the depositor, and consign it in court upon refusal to receive it unless  the deposit is for compensation. If the depositary has reasonable grounds to believe that the thing has not been lawfully acquired, he may return it. If there are 2 or more depositors, if they are not solidary and the thing can be divided, they cannot demand more than their share. But if there is a stipulation that the thing be returned to one of the depositors, depositary shall return it only to that person.

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If deposit is gratuitous, he is obliged to reimburse ordinary and extraordinary expenses for PRESERVATION  of the thing. If for compensation, such expense is deemed included in the compensation. He must reimburse any loss arising from the character of the thing deposited unless  at the time of perfection he is not aware of, or was not expected to know, the dangerous character of the thing, or unless he notified the depositary, or the latter already knew about it without advice from him.

Extinguishment: !

A deposit is extinguished when (not exclusive): a) Upon the loss or destruction of the thing deposited  b) In gratuitous deposit, upon death of either party

JUDICIAL DEPOSIT When Constituted: !

NECESSARY DEPOSIT

A judicial deposit or sequestration takes place when an attachment or seizure of property in litigation is ordered

Object: When Constituted: !

A deposit is necessary when: a) Made in compliance with a legal obligation  b) It takes place on the occasion of any calamity (fire, flood) c) Made by travelers in hotels or inns ( Due diligence) d) Made by passengers with common carriers ( Extraordinary  Diligence)

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Purpose: !

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Hotel-keeper is responsible for the deposit of effects made by travellers, provided  that notice was given to them of the effects  brought by guests and that the guests take the precautions which said hotel-keeper advised relative to the care and vigilance of their effects. Hotel-keeper is also liable for the vehicles, animals, and articles , which have been placed in the annexes  of the hotel. Liability of hotel-keepers include loss or injury to personal property  caused by servants or employees and even strangers, but not that which may proceed from force majeure. Act of a thief or robber is not deemed a force majeure unless  done with the use of arms or irresistible force. Hotel-keeper is not liable if loss is due to the acts of the guest , his family, servants, visitors, or if the loss arising from the character of the thing. Any stipulation which suppresses or diminishes the liabilities of the hotel-keeper shall be void. Hotel-keeper has a right to retain the things brought into the hotel  by the guest as a security for credits on account of lodging and other supplies usually furnished to hotel guests. (Pledge)

To secure the right of a party to recover in case of favorable  judgment

Obligations:

Hotel-Keeper Liabilities and Right of Retention: !

Movable or immovable property

Depositary cannot be relieved of his responsibility until the controversy has come to an end or unless the court orders

Compensation: !

Always remunerated (onerous)

Others: !

Escrow - a written instrument which by its terms imports a legal obligation and which is deposited by the grantor, promisor, or obligor, or his agent with a stranger or third party, to be kept by the depositary until the performance of a condition or the happening of a certain event, and then to be delivered over to the grantee, promisee, or obligee. Thus, the deposit of rentals in escrow with a bank, in the name of the court, may be duly ordered by the court.