DEPOSIT is a contract constituted from the moment a person receives a thing

belonging to another with the obligation of safely keeping it and of returning the
same.
Characteristics

Real Contract- contact is perfected by the delivery of the subject matter

Unilateral (Gratuitous Deposit ) only the depositary has an obligation
Bilateral (Onerous deposit) give rise to an obligation of both the depositary
and depositor

Distinction between Deposit and Mutuum

Distinction
As to Purpose
When to Return

Subject Matter
Relationship
Compensation

Distinction
Purpose
Subject Matter
Compensation

Deposit
Principal Purpose is safekeeping or
custody
Depositor can demand the return of
the subject matter at will
May be movable or immovable
property
Depositary and depositor
No compensation of things
deposited except upon mutual
agreement
Deposit
Principal Purpose is safekeeping or
custody
Movable/corporeal things only in
case of extrajudicial deposit
May be gratuitous

Mutuum
Principal Purpose is consumption
The lender shall wait until the
expiration of the period granted
to the borrower
Only money or fungible thing
Creditor and Debtor
There is compensation of credits

Commodatum
Principal Purpose is transfer of
the use
Both movable and immovable
Essentially and always gratuitous

KINDS OF DEPOSIT
1. Judicial takes place when an attachment or seizure of property in litigation
is ordered.
2. Extra-Judicial
a. Voluntary one wherein the delivery is made at the will of the
depositor or two or more persons each of whom believes himself to
be entitled to the thing deposited.
b. Necessary - One wherein the delivery is made upon compliance to
a legal obligation, on occasion of any calamity, or by travellers in
hotel and inns, or by travellers with common carriers.
Distinction
Creation

Judicial
Will of the court

Extra-judicial
Will of the party or contract

Purpose

Cause
Subject
matter
When must
the thing be
returned
To whom the
thing is held

Security or insure the right of party

to the property or to recover in case
of favorable judgment
Always onerous
Movables or immovables, but
generally immovables
Upon order of the court or when
litigation is ended
To person who has a right

Safekeeping or Custody

Can be compensated or not but

generally gratuitous
Only movables
Upon demand of the depositor

Depositor or third person

designated

Article 1965 : Generally contract of deposit is gratuitous except:

1. When there is contrary stipulation
2. When depositary is engaged in storing goods
3. Property is saved from destruction without knowledge of the owner
Obligations of Depositary
1. To keep the thing safely (Art 1972)
2. To return the thing
a. Depositor, his heirs, successors or person designated in the
contract
b. Depositor is incapacitated
- Depositary must return the thing to the legal representative
of the incapacitated or to the depositor himself after he
acquires capacity.
c. Depositor is capacitated and depositary is incapacitated
- The depositary does not incur the obligation of a depositary
but he is liable to return the thing to the depositor while still
in his possession; or to pay the depositor of the amount
which he may be benefited himself or its price subject to the
right of any third person who acquired the thing in good faith.
3. Not to deposit the thing with a third person unless authorized by express
stipulation.
Depositor is liable to the loss of the thing if:
a. Transfer the deposit to a third person without authority even though there
is no negligence on his part and the third person
b. He deposit the thing to a person who is manifestly careless or unfit
although authorized even in the absence of negligence
c. The thing is lost through the negligence of his employees whether the
latter are manifestly careless or not.
4. If the thing deposited should earn interest
a. Collect the interest and capital itself as it falls due
b. To take step to preserve its value and rights corresponding to it.

5. Not to commingle the thing deposited if stipulated

6. Not to make use of the thing deposited unless authorized
General Rule: Deposit is for safekeeping of the subject matter and not for
use. The unauthorized use by the depositary would make him liable for
damages. Exceptions: 1. When the preservations of the thing requires its use;
and 2. When authorized by the depositor
7. When the thing deposited is delivered sealed and closed:
a. To return the thing deposited in the same condition
b. To pay for damages should the seal or lock be broken though his fault
c. To keep the secret of the deposit when the seal or lock is broken with or
without his fault
The depositary is authorized to open the thing deposited which is closed and sealed
when:
1) There is presumed authority
2) Necessity
8. To change the way of the deposit if under the circumstances, the depositary
may reasonably presume the that the depositor would consent the change if
he knew of the facts of the situation, provided that he notifies the depositor
thereof and wait for his destruction unless delay would cause danger.
9. To pay interest on sums converted to personal use if the deposits consists of
money
10.To be liable to loss through fortuitous event if: (SUDA)
a. Stipulated
b. Uses the thing without depositors permission
c. Delays in return
d. Allows other to use it
Obligation of the depositor
1. To pay the expenses for preservation
a. If deposit is gratuitous depositor is required to reimburse the depositary
for the expenses incurred for the
b. If the deposit is for valuable consideration expenses is borne by the
depositary unless there is a contrary stipulation
2. To pay losses incurred by the depositary due to the character of the thing
deposited
General rule: The depositor shall reimburse the depositary for any loss arising
from the character of the thing deposited:
Exceptions:
1. At the time of the deposit, the depositor is not aware of the dangerous
character of the thing
2. When the depositor is not expected to know the dangerous character of
the thing;

3. When the depositor notified the depositary of the same;

4. When the depositary was aware of it without advice from the depositor
Extinguishment of Voluntary Deposit (LDO)
1. Loss or destruction of the thing deposited
2. In case of gratuitous deposit, Death of either the depositor or depositary
3. Other causes, return of the thing, novation, merger, expiration of the term,
fulfillment of resolutory condition.
Necessary Deposits
1.
2.
3.
4.

Compliance with legal obligation

Occasion of any calamity
Travellers in hotels and inns
Travellers with common carrier

Deposits in hotels and inns

The keepers of the hotels or inns shall be responsible as depositaries for the
deposit made by travellers provided;
1. Notice was given to them or to their employees of the effects brought by the
guests
2. The guests take the precautions which the hotel keepers advised relative to
the care and vigilance of their effects.