Deposit

- 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 of the thing delivered is not the principal
purpose of the contract, there is no deposit but some other contract.
- Real contract = perfected by delivery
- Unilateral contract = when deposit is gratuitous
- Bilateral contract = when deposit is for compensation
- Purpose = safekeeping = end of the contract is representation of one by another and not the custody
and preservation of the thing delivered
- Binding effect = when there is no delivery, there is merely an agreement to deposit (future deposit
is a consensual contract)
- Creation = may be created by virtue of the court
Contract DEPOSIT MUTUUM COMMODATUM
Purpose Safekeeping Consumption Transfer of use
Depositor can demand the thing at Lender waits for the
Return
will expiration of period
Gratuity May be gratuitous Essentially gratuitous
Thing Movable Money and fungible things
Extrajudicial deposits – movable Movable and
Thing
things and immovable immovable

Judicial deposit – an attachment or seizure of property in litigation is ordered

Extrajudicial deposit
a. Voluntary – delivery is made by will of the depositor and the person who believes himself
entitled to the thing deposited
b. Necessary – one made in compliance with legal obligation
i. Deposits are generally voluntary but it becomes necessary:
1. In compliance with legal obligation
2. On the occasion of any calamity
3. Travelers in hotels and inns
4. By travelers with common carriers

GR: Deposit is gratuitous

XPN: contrary to stipulation – not contrary to LMGPP
XPN: depositary engaged in business of storing goods – for compensation and not out of generosity
XPN: property saved from destruction without the knowledge of the owner – the property owner should
pay for just compensation

When the object is safe keeping – movable or personal property

When the object is to protect the things of parties – it may cover movable or immovable property

Voluntary Deposit - the delivery is made by the will of the depositor

- The difference between voluntary and necessary deposit is the depositor’s freedom to determine
who the depositary would be.
- Generally, the depositor must be the owner of the thing but it may belong to another so carriers and
agents may deposit goods because it is temporary
- If there are multiple depositors, you may compel them to settle the conflicting claims
- Contract of deposit may be entered orally or in writing as long as there is the delivery of the thing
- Incapacitation of depositor – the depositary’s obligation is to return the deposit to the legal
representative of the depositor.
 - Incapacitation of depositary – the depositary is liable to return the thing and to pay the depositor or
its price subject to the right of any third person who acquired the thing in good faith

Obligations of the Depositary

1. Keep the thing safely and return it to the person who may have been designated in the contract
o Degree of care (same diligence as he would exercise over his property)
 Essential requisite of juridical relation – confidence
 Presumption – depositor took account the diligence of the depositary
o Rules
 Depositary is liable if there is loss though fault or negligence
 Loss of thing
 Degree of care is higher when the deposit is for compensation
 Return before the specified date
2. The depositary may deposit the thing to a third person if there is a stipulation
a. Liability for loss
i. When deposited to third person without authority
ii. When deposited to third person who is manifestly careless or unfit
iii. When the thing is lost through negligence of employees
iv. *the depositary will not be liable for the 3rd person when stipulated. (3rd person is not
manifestly careless)
3. The depositary should notify the depositor if he changes the way of the deposit, unless delay would
cause danger.
4. If the thing deposited earns interest, the depositary collects interest if it becomes due and
demandable and if such steps are necessary for the preservation of the thing
5. The depositary is permitted to commingle grain and other articles of the same kind and quality,
unless stipulated otherwise.
6. The depositary cannot make use of the thing unless authorized. He is liable for damages. If
preservation of the thing requires its use, it must be used only for that purpose.
7. When the use of the thing is allowed, it is no longer a deposit and it becomes loan or commodatum,
except if safekeeping is still the principal purpose.
8. The depositary is liable for the loss of the thing through a fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing without the depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it, even though he himself may have been
authorized to use the same.
9. money in banks and similar institutions are governed by provisions concerning simple loan
10. when the thing deposited is closed and sealed, depositary returns it in the same condition
11. payment for damages if it was opened and the promise to keep the secret with or without his fault
12. the depositary is presumed authorized to open the box if it is necessary
13. obligation to return products, accessories and accessions
b. accessories – anything that is necessary for the perfection, use, and preservation of a thing
c. accessions - anything attached to the principal thing
14. The depositary cannot demand the depositor prove his ownership. If there is reasonable grounds to
believe that the thing has not been lawfully acquired by the depositor, the former may return the
same.
15. The depositary returns to the depositor who is designated in the contract, if there are multiple
depositors
16. If the depositor becomes incapacitated, the depositary returns the thing to the legal representative
 17. Place designated for return (transportation expense borne by depositor) or same place where
deposit was made
18. Deposit may be return by demand even if there is a specified period. XPN: judicially attached things
19. The depositary may return it even before the specified time has expired.
20. The depositary has the obligation to return the thing deposited but he is not liable for loss by force
majeure or by government order. If he receives money or another thing, he should deliver it to
depositor
21. If depositor’s heir sold the thing in good faith,

Obligations of the Depositor

1. Depositor is obliged to reimburse the expenses incurred for the preservation (gratuitous deposit)
2. Depositor reimburses for any loss due to character of the thing
3. Depositary’s right of retention (pledge created by operation of law)
4. Deposit is extinguished:
a. Upon loss or destruction of the thing deposited
b. Gratuitous deposit: death of either parties
*force majeure - ACTS OF GOD OR FORCE MAJEURE refer to any event beyond the reasonable control,
unavoidable
Necessary Deposit
i. Deposits are generally voluntary but it becomes necessary:
a. In compliance with legal obligation – governed by the rules on voluntary deposit
b. On the occasion of any calamity – payment for just compensation
c. Travelers in hotels and inns – hotels are held responsible as long as they inform the guests and
the guests take precautions prescribed regarding safekeeping. Liability extends to those who
offer lodging for compensation. (hotels are not liable for thief or robber done with irresistible
force)
The hotel is only liable for loss that arises from the character of the things brought into the hotel
d. By travelers with common carriers -

Judicial Deposits – governed by rules of court

- When the attachment or seizure of property in litigation is ordered.
- For both immovable and movable property
- The depositary cannot be relieved of his responsibility until the court orders so
- The depositary of the property is bound to comply with all the obligations of a good father of a
family
- Auxiliary – because there is a pending case
- Purpose = maintain the status quo during litigation
- The difference between extrajudicial and judicial deposits
Extrajudicial deposit Judicial deposit
Origin By will of the parties (there is a contract) by will of the court
Security and secure the right of party to
Purpose Custody and safekeeping
recover in case of a favorable judgement
Subject matter Movable Both movable and immovable
May be compensated but generally
Remuneration Always onerous
gratuitous

Guaranty
- Guarantor binds himself to the creditor to fulfill the obligation of the principal debtor when he fails
to do so
o If the person is in a solidary obligation with the debtor it is now a contract of suretyship
- Accessory – dependent on agreement of principal debtor
 - Subsidiary – takes effect when principal debtor fails
- Unilateral – arises upon failure of principal debtor
- A person cannot be a personal guaranty of himself
- Guarantee is gratuitous unless there is a stipulation
- Married woman can guarantee an obligation of husband without husband’s consent
- If the guarantee is entered upon without the knowledge of principal debtor, there can be
reimbursement
- There is a guarantee of future debts even if the amount is unknown but there can be no claim if the
price is not yet certain and not yet demandable
- Can be a conditional obligation
- Guarantor’s obligation does not exceed principal debtor’s obligation

Classification
1. Guaranty in the broad sense
a. Personal – credit given to person who guarantees fulfillment of the principal obligation
b. Real – guarantee is property (Real mortgage or Antichresis, movable – pledge)
2. As to its origin
a. Conventional – by parties
b. Legal – by law
c. Judicial – ordered by court
3. As to consideration
a. Gratuitous – no remuneration for acting as guarantor
b. Onerous – guarantor receives remuneration
4. As to the person guaranteed
a. Single – single performance
b. Double – fulfillment of prior guaranty
5. As to its scope and extent
a. Definite - Limited to specific portion
b. Indefinite – principal obligations and its accessories
Suretyship
- One person undertaken an obligation and
another person is also under a direct and
primary obligation
- The solidary debtor is the solidary debtor