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Nature, Purpose and Characteristics Simple Loan (Mutuum) Defined
Nature, Purpose and Characteristics Simple Loan (Mutuum) Defined
Art. 1933: By a contract of loan, one of the parties delivers to another xxx 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.
Tolentino purchased land from Luzon Rice Mills for Php25,000 payable in three installments.
Tolentino defaulted on the balance so the owner sent a letter of demand to him. To pay, Tolentino
applied for loan from Gonzalez on condition that he would execute a pacto de retro sale on the
property in favor of Gonzalez. Upon maturation of loan, Tolentino defaulted so Gonzalez is
demanding recovery of the land. Tolentino contends that the pacto de retro sale is a mortgage and
not an absolute sale.
The Supreme Court held that upon its terms, the deed of pacto de retro sale is an absolute sale
with right of repurchase and not a mortgage. Thus, Gonzalez is the owner of the land and
Tolentino is only holding it as a tenant by virtue of a contract of lease.
Commodatum Defined
Art. 1933: By the contract of loan, 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, in which case the
contract is called a commodatum. xxx
- the bailee acquires the use of the thing loaned but not its fruits (Art. 1935), EXCEPT if the
parties stipulate use of fruits (Art. 1940)
Pajuyo v. CA, G.R. No. 146364, June 3, 2004
Pajuyo purchased the rights over a property from Pedro Perez. Thereafter, he
constructed a house and he and his family lived there. Later, Pajuyo agreed to let
Guevarra live in the house for free provided that Guevarra maintain cleanliness and
orderliness of the house. They also agreed that Guevarra should leave upon demand.
But when Pajuyo later told Guevarra that he needed the house, Guevarra refused,
hence an ejectment case was filed.
Distinctions
COMMODATUM v. MUTUUM
Purpose
- to transfer either the use or possession of the thing loaned; for safekeeping of the thing
delivered and returning it
Characteristics of Commodatum
Parties
o CONSENT
Art. 1315: Contracts are perfected by mere consent, and from that moment the parties
are bound not only to the fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be in keeping with good faith,
usage and law.
o OBJECT
Art. 1937: Movable or immovable property may be the object of commodatum.
Francisco is the owner of land and he allowed his brother, Andres, to erect a warehouse
in that lot. Both Francisco and Andres died and their children became their respective
heirs: Mina for Francisco and Pascual for Andres. Pascual sold his share of the
warehouse and lot. Mina opposed because the lot is hers because her predecessor
(Francisco) never parted with its ownership when he let Andres construct a warehouse,
hence, it was a contract of commodatum. What is the nature of the contract between
Francisco and Andres?
The Supreme Court held that it was not a commodatum. It is an essential feature of
commodatum that the use of the thing belonging to another shall be for a certain period.
The parties never fixed a definite period during which Andres could use the lot and
afterwards return it.
NOTA BENE: It would seem that the Supreme Court failed to consider the possibility of
a contract of precardium between Francisco and Andres. Precardium is a kind of
commodatum wherein the bailor may demand the object at will if the contract does not
stipulate a period or use to which the thing is devoted.
Doronilla is in the process of incorporating his business and to comply with one of the
requirements of incorporation, he caused Vives to issue a check which was then
deposited in Doronillas savings account. It was agreed that Vives can withdraw his
money in a months time. However, what Doronilla did was to open a current account
and instructed the bank to debit from the savings account and deposit it in his current
account. So when Vives checked the savings account, the money was gone. Is the
contract a mutuum or commodatum?
Supreme Court held that the contract is a commodatum. Although in a commodatum,
the object is a non-consumable thing, there are instances where a consumable thing
may be the object of a commodatum, such as when the purpose is not for consumption
of the object but merely for exhibition (Art. 1936). 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.
o CONSIDERATION
Art. 1933: xxx Commodatum is essentially gratuitous.
Art. 1935: xxx if any compensation is to be paid by him who acquires the use, the
contract ceases to be a commodatum.
o DELIVERY
- perfects the contract
Tolentino made a loan from Island Savings Bank secured by a mortgage. The Bank did
not release the whole amount but only a portion thereof. Later, the Bank experienced
liquidity problems and the Monetary Board of Central Bank prohibited it from making
new loans and much later, from doing business in the Philippines. Thereafter, the Acting
Superintendent of Central Bank took charge of its assets. Upon expiration of the loan
term, the Bank filed extrajudicial foreclosure of the mortgage. Was there a perfected
contract of loan when only a portion of the amount was delivered?
The Supreme Court held that there was only partial delivery. As such, the contract is
deemed perfect only in so far as what has been delivered. The mortgage cannot be
entirely foreclosed, except for up to the amount of the actual amount released, but the
Bank can recover the interest of the partial loan. Tolentino cannot anymore demand the
remaining amount of the loan from the Bank because he defaulted on his payment. His
liability offsets the liability of the Bank to him.
RIGHTS AND OBLIGATIONS OF THE PARTIES
o pay for the ordinary expenses for the use and preservation of the thing
loaned
- no reimbursement for ordinary expenses
o bailee is not entitled to the fruits of the thing loaned, EXCEPT if there is
a stipulation to the contrary
o bailee must take care good care of the thing with the diligence of a
good father of the family (art. 1163)
Q: If the parties in a commodatum can stipulate that the bailee may make use of
the fruits, wouldnt that make the contract one of usufruct?
A: A usufruct is a contract by which the usufructuary is allowed by the owner to enjoy
the fruits. By that, it means that the main cause of the usufruct is to enjoy the fruits. In a
contract of commodatum, the consideration is the use of the thing and if there is a
stipulation for the enjoyment of the fruits, it must only be incidental to the use of the
thing itself.
Republic v. Bagtas, 6 SCRA 262 (1962)
Bagtas borrowed three bulls from the Bureau of Animal Industry for a period of one year
with breeding charge at 10% of book value. After one year, the contract was renewed
only for one bull but Bagtas did not return the two, one of which died because of
gunshot wound during the Huk raid. Is Bagtas liable for the loss of the bull?
Supreme Court held that Bagtas was liable for the loss of the bull even though it was
caused by a fortuitous event. If the contract was one of lease, then the 10% breeding
charge is compensation (rent) for the use of the bull and Bagtas, as lessee, is subject to
the responsibilities of a possessor. He is also in bad faith because he continued to
possess the bull even though the term of the contract has already expired. If the
contract was one of commodatum, he is still liable because: (1) he kept the bull longer
than the period stipulated; and (2) the thing loaned has been delivered with appraisal of
its value (10%).
o liable for damages if he knew of the flaws of the thing loaned and did
not inform the bailee, who incurs damages by reason thereof
- REQUISITES: