Credit transactions include all transactions involving the

purchase or loan of goods, services, or money in the present with

a promise to pay or deliver in the future

(a) Secured transactions or contracts of real security. — Those

supported by a collateral or an encumbrance of property;1
and
(b) Unsecured transactions or contracts of personal security.
— Those the fulfi llment of which by the principal debtor is
secured or supported only by a promise to pay or the personal
commitment of another such as a guarantor or surety.

security is something given, deposited, or serving as

a means to ensure the fulfi llment or enforcement of an obligation
or of protecting some interest in property.

As to ownership – IN commodatum ownership of an non consumable is retained by the bailor

and the bailee has to return the thing

IN mutuum or simple loan, ownership is transferred to the bailee and he is free to consume the
fungible or consumable thing however he must replace it with an item of same kind or quality.

A thing is consumable when it is consumed when used in a

manner appropriate to its purpose or nature, like rice, gasoline,
money, fruit, firewood, etc.

The credit of an individual means his ability to borrow money

or things by virtue of the confidence or trust reposed by a lender
that he will pay what he may promise within a specified period.

Commodatum and mutuum (simple loan)

distinguished.
It is relatively simple to determine whether a given loan is
commodatum or mutuum by bearing in mind the following
principal points of distinction:
(1) Commodatum ordinarily involves something not consumable
(see Art. 1936.), while in mutuum, the subject matter is money
or other consumable thing;
(2) In commodatum, ownership of the thing loaned is retained
by the lender (Art. 1933.), while in mutuum, the ownership is
transferred to the borrower;
(3) Commodatum is essentially gratuitous (ibid.), while
mutuum may be gratuitous or it may be onerous, that is, with
stipulation to pay interest;
(4) In commodatum, the borrower must return the same thing
loaned (ibid.), while in mutuum, the borrower need only pay the
same amount of the same kind and quality

(5) Commodatum may involve real or personal property (Art.

1937.), while mutuum refers only to personal property;
(6) Commodatum is a loan for use or temporary possession
(Art. 1935.), while mutuum is a loan for consumption;
(7) In commodatum, the bailor may demand the return of the
thing loaned before the expiration of the term in case of urgent
need (Art. 1946), while in mutuum, the lender may not demand
its return before the lapse of the term agreed upon; and
(8) In commodatum, the loss of the subject matter is suffered
by the bailor since he is the owner (Art. 1942; Art. 1174.), while in
mutuum, the borrower suffers the loss even if caused exclusively
by a fortuitous event and he is not, therefore, discharged from his
duty to pay.
It may also be said that while commodatum is purely personal
in character (see Art. 1939.), mutuum is not so.

A commodatum may be an ordinary commodatum or a precarium

Precarium means that the thing is returned upon any time demand is made

Take note that an accepted promise does not bind a commodatum or a mutuum however the mere
accepted promise is treated already as an consensual contract.

A commodatum or mutuum itself which is a real contract is only perfected and binding upon delivery of
the thing

Commodatum is essentially gratuitous. Hence, the contract

ceases to be a commodatum if any compensation is to be paid by
the borrower who acquires the use. In such a case, there arises a
lease contract.

The extent of the right of the bailee is over the use of the thing only and so the fruits belongs to
the owner which is the bailor unless there is contrary stipulation

Generally, a commodatum only has a non consumable thing. An exception of a non consumable
that is not intended for consumption and would then still be returned at the end of the period
such as exhibition

Since ownership does not pass unto the bailee, a lessee, holder of an usufruct or the like may
be a bailor

Since a commodatum is purely personal, death of either the bailor or bailee extinguishes the
real contract

Generally, you cannot lend to another unless there is stipulation to that end however members
of the household of the bailee may make use of the thing unless there is a contrary stipulation or
the very nature of the thing advises against it/

For expenses
Ordinary expenses or for use or preservation of the thing

- The bailee bears the expense for he must exert the diligence of a good father of a family

For ordinary wear and tear, the bailor bears the expense unless there is a contrary stipulation
unless the wear and tear was caused due to the fault and negligence of the bailee or he
devoted the thing to a different purpose than what was agreed upon

Extraordinary expenses – borne by the bailor however there must be notice as to give him a
decision on what to do unless there is urgent need for the repair or danger abounds

If the extraordinary expenses was incurred through the actual use of the thing – expenses are
borne 50-50

Unless there is a contrary stipulation

Those other expenses such as an extra tire are borne by the bailee

General rule as to right of retention, the bailee has none for the bailor has ownership and he
merely lends the thing for temporary use. It may not bring rise to an adverse claim for lack of
just title.

The exception is if article 1951 applies. Then he may retain the thing until he is reimbursed for
the damages however he may not sell the thing for the sake of reimbursing.

Due to hidden defect

(1) There is flaw or defect in the thing loaned;

(2) The fl aw or defect is hidden;
(3) The bailor is aware thereof;
(4) He does not advise the bailee of the same; and
(5) The bailee suffers damages by reason of said fl aw or
defect.

The failure to disclose the fact is bad faith that causes liability. however if the defect was
unknown to the bailor he bears no liability for no consideration was given

They are solidary liable if multiple

General rule as to loss due to a fortuitous event, the bailee is not liable to loss or damage

However under the following circumstances he bears such liability for his improper acts for
being the proximate cause

(1) If he devotes the thing to any purpose different

from that for which it has been loaned;
(2) If he keeps it longer than the period stipulated, or
after the accomplishment of the use for which the commodatum
has been constituted;
(3) If the thing loaned has been delivered with appraisal
of its value, unless there is a stipulation exempting the
bailee from responsibility in case of a fortuitous event;

(4) If he lends or leases the thing to a third person,

who is not a member of his household;
(5) If, being able to save either the thing borrowed or
his own thing, he chose to save the latter. (1744a and 1745)

General rule as to return of the thing, the bailor may not ask for the return until the period agreed
upon has passed or until purpose the thing is devoted to has been met

However the bailor may ask for it return if precarium or in case an urgent need arises such as
need to bring to an hospital or if there is an act of ingratitude. The said return may be temporary
or permanent and the said commodatum is suspended

There is a precarium if no duration has been stipulated or use or if the possession by the bailee is
merely tolerated

Return by reason of an ingratitude

(1) If the bailee should commit some offenses against the

person, the honor or the property of the bailor, or of his wife or
children under his parental authority;
(2) If the bailee imputes to the bailor any criminal offense, or
any act involving moral turpitude, even though he should prove
it, unless the crime or the act has been committed against the
bailee himself, his wife or children under his authority; and
(3) If the bailee unduly refuses the bailor support when the
bailee is legally or morally bound to give support to the bailor.

TO avoid expenses, the bailor may not simply abandon the thing to the bailee since the
expenses may exceed the value of the thing

Simple loan or mutuum

Simple loan or mutuum is a contract whereby one of the

parties delivers to another money or other consumable thing
with the understanding that the same amount of the same kind
and quality shall be paid.1 (Art. 1933.)
It involves the return of the equivalent only and not the
identical thing because the borrower acquires ownership thereof.
(see Art. 1978.) A loan of money, however, may be payable in
kind.
The primary difference is the obligation is to pay and not to return since there is consumption
here. The consumption is possible for the ownership is passed in here

Fungible things, are those which are usually dealt with by

number, weight, or measure such as rice, oil, sugar, etc. so that
any given unit or portion is treated as the equivalent of any other
unit or portion. Capable of substitution of the same kind and quality

distinction of mutuum and barter

By the contract of barter or exchange, one of the parties binds

himself to give one thing in consideration of the other’s promise
to give another thing. (Art. 1638.)
(1) The distinction between mutuum and barter lies in the
subject matter. In the former, it is money or any other fungible
things; in the latter, non-fungible (non-consumable) things.
(2) In commodatum, the bailee is bound to return the identical
thing borrowed when the time has expired or the purpose has
been served. In barter, the equivalent thing is given in return for
what has been received.
(3) Mutuum may be gratuitous and commodatum is always
gratuitous. (Art. 1933, pars. 2, 3.) Barter, on the other hand, is an
onerous contract. It is really a mutual sale.

If money. Pay the same in the currency stipulated and If not possible in legal tender of the Philippines

In case of extraordinary inflation or deflation, the value used is the one during the creation of the
obligation

If fungible goods, pay the same kind, quality and quantity. If not possible pay the value at the perfection
of the contract

In order that interest may be chargeable, the following are

the requisites:
(1) The payment of interest must be expressly stipulated (Tan
vs. Valdehueza, 66 SCRA 61 [1975]; Jardenil vs. Salas, 73 Phil. 636
[1942].)
(2) The agreement must be in writing (Art. 1956.); and
(3) The interest must be lawful. (see, however, note to Arts.
1957 and 1961.)

If interest is state but not exact, then 12 percent. If no interest stipulated. The legal interest of 6
percent may apply

If incurred in delay, then interest 6 if in forbearance 12 – primarily 12

Place and time of payment to determine interest if not

shall not earn interest except in two instances:

(1) When judicially demanded as provided for in Article
2212 (supra.); and
(2) When there is an express stipulation made by the parties
to wit: that the interest due an unpaid shall be added to the
principal obligation and the resulting total amount shall earn
interest. (see Mambulao Lumber Co. vs. Phil. National Bank, 22
SCRA 359 [1968].) This practice is called compounding interest and
it is allowed by the Usury Law if there is express stipulation.
(Sec. 5, Ibid.)

This article simply means that if unstipulated interest (it is,

therefore, not due) is paid by mistake, the debtor may recover as
this would be a case of solutio indebiti or undue payment. (Art.
2154.9) But where the unstipulated interest, or interest stipulated,
there being a stipulation but it is not in writing, is paid voluntarily
because the debtor feels morally obliged to do so, there can be no
recovery as in the case of natural obligations. (

Deposit – characteristics

It is a real contract perfected by delivery

It can be gratuitous or bilateral if there are corresponding obligations

The primary goal must be safekeeping of the thing. If it is not the principal but only a accessory
obligation then the contract is some other kind

A collecting agent of debt merely has the amount deposited to him, he may not dispose of it on its own.

He cannot make use of the thing deposited to him except in case of the two instances mentioned
article 1977

A deposit is created in two ways

1. Judicial – those attached or seized by virtue litigation. It can be personal or real property
2. Extrajudicial
a. Voluntary – voluntary made or by his will
b. Necessary – made by compliance to a legal obligation, due to a calamity or by travelers with
common carrier

Generally gratuitous except

a. There is a contrary stipulation not contrary to laws, moral or customs.

b. The depository is engaged in a storing business
 c. Where property is saved in a calamity without the knowledge of the owner

Voluntary primarily covers personal things. Rights incorporeal or intangible also not covered. Deeds or
documents covering said rights are merely materialized and representative expression of the rights

A voluntary deposit is one wherein the delivery is made by the

will of the depositor.

The chief difference between a voluntary deposit and a

necessary deposit is that in the former, the depositor has complete
freedom in choosing the depositary, whereas in the latter, there is
lack of free choice in the depositor.

There is no need for the owner to deposit since there is no transfer of ownership involved

It may be made orally or in writing so long as requisites of contract are present

A deposit made by an incapacitated to a capacitated may is binding and demandable to the

capacitated. The guardian or administrator of the incapacitated may serve as substitute of the
incapacitated

In case of the other way around, a deposit is made by a capacitated to an incapacitated then he
shall incur no obligation except the following

1. To return the thing deposited if still in his possession

2. To pay the amount by which he has benefited himself with the thing or its price subject to
the third having acquired it in good faith

If the third person acquired the thing deposited from the incapacitated in bad faith then
proper recourse shall be go after him and not the incapacitated

Obligations

Safekeeping and to return the thing when required

He must take care of the thing as if it is his own. Ordinarily no damage except

1. He is liable if loss is due to his fault or negligence even if it was insured

2. The loss of the thing in his possession raises a presumption of fault on his part

The degree of care is higher if it is for compensation than if it is gratuitous

Return before specifi ed term. — The thing deposited must

be returned to the depositor whenever he claims it, even though
a specifi ed term or time for such may have been stipulated in the
contract.

Liability for loss. — Under Article 1973, the depositor is

liable for the loss of the thing deposited if:
(a) he transfers the deposit with a third person without
authority although there is no negligence on his part and the
third person;
(b) he deposits the thing with a third person who is manifestly
careless or unfit although authorized, even in the absence
of negligence; or
(c) the thing is lost through the negligence of his employees
whether the latter are manifestly careless or not.

The only exemption is If all three is present. He deposits the thing to a third person and it is authorized
and it was lost without negligence and the chosen third person was not manifestly careless or unfit.

The depositary may change the way or manner of the deposit

if there are circumstances indicating that the depositor would
consent to the change.
However, the depositary should first notify the depositor
and wait for the latter’s decision. This requirement may not be
dispensed with unless delay would cause danger. It follows the
general rule that the depositary must take good care of the thing
with the diligence of a good father of a family.

If the deposited should earn interest, he has the obligation to collect the interest when they are
due and to take necessary steps to preserve its value and rights corresponding to it.

Safety deposit box – is a special kind of deposit. The control and possession not given to the
bank

As a rule, the depositary is permitted to commingle grain

or other articles of the same kind and quality. In such case, the
various depositors of the mingled goods shall own the entire
mass in common and each depositor shall be entitled to such
portion of the entire mass as the amount deposited by him bears
to the whole

Except if otherwise stipulated

The use of the thing deposited. Generally cannot make use of the thing deposited and using
may cause damages unless it is with permission

With permission, and permission is not presumed

a. The thing deposited is non consumable – it loses its character as a deposit and
becomes a commodatum even if it was denominated as deposit. Except if the principal
obligation is still safekeeping
b. The thing deposited is consumable or cash – if there is permission to use it turns to a
simple loan or mutuum. But if the principal purpose is still safekeeping, it can be called a
irregular deposit such as bank deposits governed by law on loans

The exemption is if the use is necessary for the preservation of the thing but do take note that
such use is limited for the purpose of preservation only.
Irregular deposit distinguished
from mutuum.
(1) Consumable thing demandable at will by depositor. — In
an irregular deposit (supra.), the consumable thing deposited
may be demanded at will by the irregular depositor for whose
benefit the deposit has been constituted, while in mutuum, the
lender is bound by the provisions of the contract and cannot
seek restitution until the time for payment, as provided in the
contract, has arisen;
(2) Benefit accrues to depositor only. — Another point of
difference consists in the fact that in an irregular deposit, the
only benefit is that which accrues to the depositor, while in a
loan, the essential cause for the transaction is the necessity of
the borrower. A loan with a stipulation to pay interest is for the
benefit of both parties (see Compania Agricola de Ultramar vs.
Nepomuceno, 55 Phil. 283 [1930]; Rogers vs. Smith, 10 Phil. 317
[1908].); and

(3) Depositor has preference over other creditors. — The third

one is that the depositor in an irregular deposit has preference
over other creditors with respect to the thing deposited6 (see Art.
2241[13].), while common creditors enjoy no preference in the
distribution of the debtor’s property.

Loss through fortuitous event – generally not liable except in the following instances

1. If it is so stipulated
2. If he uses the thing without the depositors permission
3. If he incurs delay
4. If he allows a third person to use even if he himself was authorized to use it

Contract of loan. — Deposits of money in banks, whether

fi xed, savings, and current, are really loans to a bank because the
bank can use the same for its ordinary transactions and for the
banking business in which it is engaged

they are irregular deposits for they incur interest and so they are governed by law on simple
loan

Relation of creditor and debtor. — Accordingly, the relation

between a depositor and a bank is that of a creditor and a debtor.
The depositor (creditor) lends the bank (debtor) money and
the bank agrees to pay the depositor on demand. The deposit
agreement between the bank and the depositor determines the
rights and obligations of the parties. Consequently:
(a) A bank’s failure to honor a deposit is failure to pay
its obligation as debtor and not a breach of trust arising
from a depositary’s failure to return the subject matter of the
deposit. (Serrano vs. Central Bank, 96 SCRA 96 [1980].) It will
not constitute estafa through misappropriation punishable under rpc

(b) The payment by a bank of the amount of a depositor’s

check is not a loan to the latter by the former which may
be satisfi ed by a subsequent deposit; but a payment by the
bank as debtor to the depositor as creditor. Such payment
extinguishes so much of the obligation of the bank as is
represented by the check paid or honored by the bank out
of the latter’s deposit. (Hilado vs. De La Costa, 83 Phil. 471
[1949].)
(c) The general rule is that a bank can compensate
or set off the deposit in its hands for the payment of any
indebtedness to it on the part of the depositor.10 (Gullas vs.
Phil. National Bank, 62 Phil. 519 [1935]; Republic vs. Court
of Appeals and Cuaycong, 65 SCRA 186 [1975]; Equitable
PCI Bank vs. Ng Sheung Ngor, 541 SCRA 223 [2007].) In a
true deposit, compensation is not allowed. (see Art. 1287.)
The money received is termed a “deposit,” although it is not
strictly so, as the depositor does not expect to receive the
identical money in return but an equivalent sum. (see Art.
1953.) The money is mingled with other money, the entire
amount forming a single fund from which depositors are
paid. (2 C.J. 628.)
(d) In the performance of its obligations, the drawee
bank is bound by its internal banking rules and regulations
and is liable to the depositor for fraud, negligence, or delay

The award of exemplary damages, however,

is unjustifi ed in the absence of malice, bad faith or gross
negligence. But moral damages may be recovered even if the
bank’s negligence may not have been attended with malice
and bad faith. (Tan vs. Court of Appeals, 239 SCRA 310
[1994].)
(e) The bank is engaged in business impressed with
public interest, and it is its duty to protect in return its many
clients and depositors who transact business with it with the
highest degree of care, more than that of a good father of the
family or of an ordinary business fi rm. It is its obligation to
see to it that all funds invested with it are properly accounted
for and duly posted in its ledger. In every case, the depositor
expects the bank to treat his account with utmost fi delity,
whether such account consists of only a few hundred pesos
or of millions, always having in mind the fi duciary nature of
their relationship.11

It has been held that suspension of a bank which had fallen

into a “distressed fi nancial situation” by order of the Central
Bank cannot excuse it from its obligations to depositors who had
nothing whatever to do with the Central Bank actuations or the
events leading to the bank’s distressed state. (Overseas Bank of
Manila vs. Court of Appeals, 172 SCRA 521 [1989].) But the bank
may not be liable to pay interest on the deposit during the period
of suspension.

Obligations of the depository

a. To return in the same state if it was in a container which was closed and sealed
b. To pay for damages if it was opened through his fault and this is always presumed
c. To keep the content a secret whether it was opened thru his fault or not

The depository may open a closed and sealed thing on two instances

a. There was presumed authority given to him

b. There is necessity to open the thing for purposes of safekeeping

Since the depositor is the owner or at least the representative of the owner, then he must have in its
return the things products, accessories and accessions

Generally, since no use and so no interest for the depository unless he used it without permission or
incurs delay and interest starts from date of use

IN terms of ownership of the thing

It is not necessary to be the owner to deposit and much more the depository may not require the
depositor to prove his ownership for this may open to bad faith and fraud.

If a third person appears to be the owner of the thing

For paragraph 1

a. He must know the true owner

b. That the thing must be stolen

The depository may then advise the true owner of the thing and the said true owner shall have 30 days
or one month to claim the thing.

If he fails to claim it within 30 days then the depository is now relieved of responsibility and may even
return the thing to the depositor. The recourse of the true owner would be to go to other legal
processes

An issue would be is if the depositor claims the thing within said 30 days. Can the depository refuse? He
may incur liability against the depositor then

As to return of the thing and there are multiple depositors

 1. The thing is divisible and the depositors are joint – then each one may only claim their
proportionate share
2. The thing is indivisible and the obligation is solidary – then the whole thing can be claim by one
of them and he may not do anything prejudicial to the others
3. If there is a stipulation as to the person – return only to him

The return of the thing to whom

1. In case of incapacity of the owner, it must be returned to the guardian, administrator or the
depositor or to the owner himself if he were to gain capacity then
2. Generally, the thing may only be claimed by the owner/depositor, his designated representative
or his heirs

Place of return

1. General rule, the return is made at the place agreed upon by the parties. Transportation cost
shall be borne by the depositor since the deposit is gratuitously in his favor
2. If there was no agreed place, at the place where the thing deposited is provide there is no
malice in the part of the depository

When to return

Generally at any time whether a period has been stipulated or not. If there was compensation for the
period then such depository would still be entitled to the entirety of the compensation even if the
agreed period is cut short

Exceptions

1. The thing is judicially attached by an order for safekeeping

2. If there is an opposition by a third person and such claim of ownership is through an action or
interpleader

Return of the thing by the depository notwithstanding of a stipulated period if

a. The deposit was gratuitous

b. For justifiable reason such as necessity to go abroad

If the depositor would refuse to such a return, he may place it at the disposal of judicial authority

Exception: if the deposit had a valuable consideration. He may not return it until the end of the period
even if he were to suffer inconvenience

The depository has to return the thing. If it was lost

a. Through fortuitous event, then no liability

b. Through government order, he may still need to return cash or any substitute given to him
The above article envisions a situation where the depositary
dies and the object of the deposit is left with his heir who, in good
faith, sells it. The obligation of the heir is limited to the return of
the price received or to assign the right to collect the same if it
has not been paid and not the real value of the thing. The rule is
based on considerations of equity. If the purchaser who acquired
the thing acted in bad faith, the depositor may bring an action
against him for its recovery.
If the heir acts in bad faith, he is liable for damages. The sale
or appropriation of the thing deposited constitutes estafa.

Obligations of the depositor

If the deposit was gratuitous, he shall be liable for necessary ordinary and extraordinary
expenses for preservation of the thing since the law made no distinction. However preservation
or expenses for pure luxury or pleasure are not covered

If the deposit was for valuable consideration, then the expenses for preservation are deemed
included unless contrary stipulated

Generally, the depositor must reimburse the depository for the loss of the thing due to it
character except in these four instances:

1. At the time of the constitution of the deposit the depositor was not aware of such character
2. Or was not expected to know of such dangerous character
3. That he had notified the depository of such character
4. That the depository was already aware of the character without need of advice from the
depositor

The depositary may retain the thing in

pledge until the full payment of what may be due him by
reason of the deposit.

Extinguishment of the deposit or no longer obliged to continue

The deposit is extinguished in the following cases

1. Upon the lost or destruction of the thing

2. In case of a gratuitous deposit, upon the death of either the depositor or depository
3. There are other causes such as return of the thing, novation, merger, expiration of the
term, fulfillment of the resolutory condition
 A deposit for compensation is not personal and is transmissible to heir. The heir has the
option to terminate the deposit before end of the period

Necessary deposit
1. In compliance by legal obligations. Such deposit shall be governed by the law on
said obligation and any deficiency is supplemented by the voluntary deposit law

The following are examples of such deposit:

(1) The judicial deposit of a thing the possession of which is
being disputed in a litigation by two or more persons (Art. 538.);
(2) The deposit with a bank or public institution of public
bonds or instruments of credit payable to order or bearer given
in usufruct when the usufructuary does not give proper security
for their conservation (Art. 586.);
(3) The deposit of a thing pledged when the creditor uses
the same without the authority of the owner or misuses it in any
other way (Art. 2104.);
(4) Those required in suits as provided in the Rules of Court;
and
(5) Those constituted to guarantee contracts with the government.
In this last case, the deposit arises from an obligation of
public or administrative character.

2. Deposit on occasion of calamity

In this type of necessary deposit, the possession of movable property passes

from one person to another by accident or fortuitously through
force of circumstances and which the law imposes on the recipient
the obligations of a bailee. Here, the more immediate object is to
save the property rather than its safekeeping.
Thus, if X saves Y’s television set in a fire, X is supposed to be its depositary.
Such a quasi-bailment is ordinarily distinguished by the name
involuntary bailment or involuntary deposit. (see 6 Am. Jur. 177.)
There must be a causal relation between the calamity and the
constitution of the deposit. Another name given to it is “deposito
miserable.

Aside from the provisions concerning

voluntary deposit, this kind shall be governed by Article 2168
(Art. 1997, par. 2.) which reads: “When during a fi re, fl ood, storm
or other calamity, property is saved from destruction by another
person without the knowledge of the owner, the latter is bound
to pay the former just compensation.” Article 2168 establishes a
quasi-contract
 3. Deposits by travelers in hotels

The following must concur

a. The hotel or it workers have been previously notified by the guests
b. That the guest have prescribed any necessary safety precautions

These include any thing given to a hotel even vehicles parked in it and hotel shall also include
any lodging for compensation

It refers to transients or temporary? And not to actual boarders

The terms “hotel-keeper” and “inn-keeper” are also synonymous.

(a) Hotel. — It has been defi ned as “a building of many
rooms chiefl y for overnight accommodation of transients
and several fl oors served by elevators, usually with a large
open street-level lobby containing easy chairs, with a variety
of compartments for eating, drinking, dancing, exhibitions,
and group meetings, with shops having both inside and
street-side entrances and offering for sale items of particular
interest to a traveller, or providing personal services, and
with telephone booths, writing tables, and wash rooms freely
available.” (Webster’s Third New Int. Dictionary, p. 1095.)
(b) Inn. — It has been defi ned as “a public house for the
lodging of travellers for compensation and until capacity is
reached; a place of public entertainment that does not provide
lodging.”

Motel. — It has been defi ned as “an establishment

which provides lodging and parking and in which the rooms
are usually accessible from an outdoor parking area

There is liability

a. Loss is caused by strangers, his workers or servants and there has been proper notice
b. Loss caused by a thief without arms or irresistible force because it is negligent

There is no liability

a. Loss due to force majeure

b. Loss by a thief who is from outside and thru arms or irresistible force and he is not
negligent in preventing it
c. Lost caused by the guest, his family, servants or visitors
d. Loss caused by the character of things the guest had brought with him in the hotel

Notice seeking to diminish such liabilities are void for being contrary to law, morals and customs
(1) Hotel-keepers and inn-keepers in offering their accommodations
to the public, practically volunteer as depositaries,
and as such, they should be subject to an extraordinary degree
of responsibility for the protection and safety of travellers who
have no alternative but rely on the good faith and care of those
with whom they take lodging. (Art. 2000.)
(2) Furthermore, inn-keepers, by the very nature of their
business, have supervision and control of their inns and the
premises thereof. As a matter of fact, authorities are to the effect
that it is not necessary in order to hold an inn-keeper liable
that the effects of the guests be actually delivered to him or his
employees; it is enough that they are within the inn.

The 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 supplies usually furnished
to hotel guests.

4. Common carrier