Meaning of bailment.

The word bailment comes from

the French word bailler,
meaning to deliver.
It may be defi ned as the delivery
of property of one person
to another in trust for a specifi c
purpose, with a contract, express
or implied, that the trust shall be
faithfully executed and the
property returned or duly
accounted for when the special
purpose is accomplished or kept
until the bailor reclaims it. (3
R.C.L. 73.)
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.
ARTICLE 1933. By the contract
of loan, one of the parties
delivers to another, either
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;
or 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.
Commodatum is essentially
gratuitous.
Simple loan may be gratuitous
or with a stipulation to
pay interest.

In commodatum the bailor

retains the ownerships of
the thing loaned, while in
simple loan, ownership passes
to the borrower. (1740a
Characteristics of the contract.
The contract of loan is:
(1) a real contract because the
delivery of the thing loaned is
necessary for the perfection of the
contract (Art. 1934; see also
Art. 1316.); and
(2) a unilateral contract because
once the subject matter has
been delivered, it creates
obligations on the part of only one
of
the parties, i.e., the borrower.
Kinds of loan.
There are two kinds of loan,
namely:
(1) Commodatum. where the
bailor (lender) delivers to the
bailee (borrower) a nonconsumable thing so that the latter
may
use it for a certain time and return
the identical thing; and
(2) Simple loan or mutuum.
where the lender delivers to the
borrower money or other
consumable thing upon the
condition
that the latter shall pay the same
amount of the same kind and
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, fi rewood, etc. (see

Art. 418.)
ART. 1962. A deposit is
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
the safekeeping of the thing
delivered is not the principal
purpose of the contract, there
is no deposit but some other
contract. (1758a)
Defi nition of contract of
deposit.
The above article in effect gives
the defi nition of a contract of
deposit. The term deposit is
derived from the word depositum

of the Roman Law.

Loans distinguished from
credit.
The credit of an individual means
his ability to borrow money
or things by virtue of the confi
dence or trust reposed by a lender
that he will pay what he may
promise within a specifi ed period.
A loan (mutuum) means the
delivery by one party (lender/
creditor), and the receipt by the
other party (borrower/debtor)
who become the owner, of a given
sum of money or other consumable
thing upon an agreement, express
or implied, to repay
the same amount of the same kind
and quality, with or without
interest.