DEPOSIT

debtor and a creditor and between the

WHAT IS CONTRACT OF DEPOSIT?
Contract of deposit refers to a
contract whereby there is delivery of a
movable or a personal property by the
depositor to the depository for purposes
of safekeeping.
- The objective of giving that personal
property to the depository is to save
keep that object for him to save keep
the same and after some time to
eventually return that object or
movable property to the depositor.
- The objective of the deposit is to give
or deliver a personal property for
purposes of safe keeping then
immovable properties should not as a
rule be made the subject matter of
deposit.
DEPOSIT
Contract which is constituted
from the moment a person receives a
thing belonging to another with the
obligation to another with the
obligation of safely keeping it and of
returning the same.
QUESTION: Is the deposits of money in
banks or other similar institutions
governed by the law on deposits?
ANSWER: No because deposit of money
in banks and other similar institutions
such as savings deposits or current
deposits are covered by the rule on
simple loan or mutuum.
ARTICLE 1980 – That fix savings and
current deposit of money in the banks it
is not covered by the rule on deposit
rather it is covered by the rule on simple
loan or mutuum. Whereby there is the
creation of a relationship between the
depositor and then the depository.
CHARACTERISTICS OF THE CONTRACT OF
DEPOSIT:
1. It is a real contract perfected by delivery.
2. The principal purpose is the safekeeping of
the thing delivered.
3. The depository cannot use the thing
deposited EXCEPT:
- If there is an agreement expressly
allowing the depository to use the thing
deposited.
- When it is necessary for the preservation
of the thing deposited.
4. As to object – it is only movable that can be
made the object.
- In extrajudicial deposit must be a
movable property.
- Immovable properties may also the
subject matter of that legal deposit
because the purpose in legal deposit is
not really to safekeep the thing but
rather to protect the interest of those
individuals having interest in that
immovable property. To protect the
rights the interest claims of the litigants of
that immovable property.
5. It is gratuitous contract EXCEPT:
6. The contract is either unilateral or bilateral –
which depends whether the contract is
gratuitous or onerous.
- GRATUITOUS – unilateral
- ONEROUS - bilateral
- When is the contract of deposit onerous?
1. If there is an agreement as to the
payment of compensation.
2. When the depository is engaged in
the business of storing goods.
KINDS OF DEPOSIT:
- Judicial (Sequestration) – is in
situation whereby immovable
properties will be given in order to
preserve the rights, claims, and
 interest of the litigants in that
immovable property.
- Extra-judicial
 Voluntary – because it is created
upon the will of the parties.
 Necessary – because it is created
by situations. Such as those made
in compliance with a legal
obligation that was created on
the occasion of calamities or
deposit of miserable. Made by
travelers in hotels and inns.
I. VOLUNTARY DEPOSIT
1. FORM
- Oral
- Written
2. EFFECT OF INCAPACITY
- Depositor is incapacitated
and depositary is
capacitated. (ARTICLE 1970)
- Depositor is capacitated and
depositary is incapacitated.
(ARTICLE 1971)
- Effect of bad faith on the part
of the third person. (Bad faith,
CAN RECOVER; Good faith,
CANNOT RECOVER)
C. OBLIGATIONS OF DEPOSITARY:
1. To keep the thing safely – if the
contract is gratuitous (for free). The
depository is only expected to
preserve the thing using ordinary
diligence or the diligence of a good
father of family.
2. To collect INTEREST earned by
certificates, bonds, securities or
instruments in possession and to
preserve their value -
3. Not to use it WITHOUT express
permission of the DEPOSITOR – need
to notify the depositor about it
however the decision is not really
necessary not even if you don’t wait
the approval of that depositor. If the
delay will cause danger to the thing
deposited.
4. To keep the secret of the deposit –
that if the thing deposited was
actually sealed or closed at the time
it was given to him then the
depository is also expected to return
the same thing sealed and closed
(ARTICLE 1981).
5. To return the thing with all its products,
accessories, and accessions – upon
the demand you have to return the
product the thing deposited itself as
well as the accessories and the
accessions (ARTICLE 1983).
6. To RETURN the thing deposited – the
depositor is expecting that the
depository would return the thing
deposited upon demand. The
depository cannot require the
depositor to prove his ownership on
the thing deposited (ARTICLE 1984).
D. LIABILITY IN CASE OF FORTUITOUS EVENT:
1. It is so stipulated.
2. Uses the thing without the depositor’s
permission.
3. He delays its return.
4. He allows others to use it, even
though he himself may have been
authorized to use the same.
E. RULE IF THERE ARE TWO OR MORE
DEPOSITORS:
A. If thing DEPOSITED is NOT DIVISIBLE
and DEPOSITORS not solidary – The
depositors are not solidary and if the
thing deposited is not divisible then
each one can get a proportionate
share.
B. If OBLIGATION is SOLIDARY or thing
DEPOSITED NOT DIVISIBLE – The
 depository can return the thing
deposited to anyone of the
depositor.
C. If there is a STIPULATION – There are
two or more depositors and there is a
stipulation then the stipulation is must
observe.
 INTERPREDER – it is a case that will be
instituted in court in order to compel
those contending parties to litigate
between them or among then to
prove the respective ownership on
the thing deposited.
F. RULE IF DEPOSITOR BECOMES
INCAPACITATED AFTER DEPOSIT:
- Deliver the deposit to his heirs or
successor in interest – person who has
administration of his property.
G. WHERE TO RETURN THE THING:
A. If a place was designated – the rule is
that it must be return at that place
where it is stipulated or agreed upon
by the parties.
B. If no place was designated – the rule
is that it shall be returned at the place
where the thing has been deposited.
H. WHEN TO RETURM THE THING:
- GENERAL RULE: Upon DEMAND
- EXCEPTIONS:
A. When Judicially Attached
B. When 3rd person opposes the
return or removal of the thing
deposited.
I. ALIENATION BY DEPOSITARY’S HEIR IN
GOOD FAITH:
1. To RETURN the price he may have
received.
2. To ASSIGN his right of action to collect
the price if it has not been paid.
J. OBLIGATIONS OF THE DEPOSITOR:
1. If DEPOSIT is GRATUITOUS – to REIMBURSE the
expenses for PRESERVATION incurred by the
DEPOSITARY.
2. To pay the DEPOSITARY for the LOSSES he
incurred by reason of the NATURE of the
DEPOSIT.
- EXCEPTIONS:
 Depositor is NOT aware or is NOT
EXPCTED to know the
DANGEROUS character of the
DEPOSIT.
 Depositor has NOTIFIED the
DEPOSITARY of such character.
 Depositary is AWARE of the
dangerous character even
without the advice.
K. EXTINGUISHMENT OF DEPOSIT:
1. Loss or destruction of the thing deposited –
there is nothing to keep if the thing
deposited is loss or destructed.
2. In case of gratuitous deposit – DEATH of
either DEPOSITOR or DEPOSITARY. – in
gratuitous deposit the nature of this aims
that it is purely personal. The death of either
depository or depositor will be ground for its
I. extinguishment.
VOLUNTARY DEPOSIT
II. NECESSARY DEPOSIT - (ARTICLE
1996)
1. Made in compliance with a legal
obligation – shall be governed by the
law.
2. Made on the occasion of calamity –
(deposit to miserable) it requires
payment of just compensation and
the same shall be governed by the
rule on deposit.
3. Made by travelers in hotels or inns –
before there can be necessary
deposit that will be created between
you the guests and the owner of the
hotel or inn. (ARTICLE 1998)
4. Made by travelers with common
carriers – they are liable. (ARTICLE
2003 and 2004)
III. JUDICIAL DEPOSIT OR SEQUESTRATION
(ARTICLE 2005):
- Judicial deposit or sequestration
takes place when there is an
attachment or seizure of property
involved in a litigation.
C. MODES OF EXTINGUSHING CONTRACT
OF DEPOSIT
1. Upon the loss or destruction of the
thing deposited.
2. In case of a gratuitous deposit, upon
the death of either the depositor or
the depositary.
3. Other grounds like the expiration of
the period or mutual withdrawal from
the contract.

A. SUBJECT MATTER
- Movable
- Immovable
ARTICLE 2007
- The depository is not really from
responsibility until there is
termination of the case.

B. OBLIGATIONS OF THE DEPOSITOR

1. If ONEROUS
- To pay the price agreed upon.
- To indemnify for damages
caused by the depositor
himself.
2. If GRATUITOUS
- To pay the necessary
expenses.
- To indemnify for damages
caused by the depositor
himself.
*Luxurious expenses are not included.

QUESTION: How about if the depositor

refuses to pay for the consideration of the
deposit? What is the right of the
depositary?
ANSWER: The depositary may retain the
thing in pledge until the full payment of
what may be due him by reason of the
deposit.