NAME: BAYO, PHILIP JHON ESTILLORE

ASSIGNMENT:

“DISTINGUISH COMMODATUM AND MUTUUM”

The difference between commodatum or mutuum becomes relatively simple to see if one bears
in mind eight principal points of distinction.

Article 1933 of the New Civil Code provides:

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:

-ordinarily involves something not consumable

-ownership of the thing loaned is retained by the lender

- essentially gratuitous

- the borrower must return the same thing loaned

- involve real or personal property

- a loan for use or temporary possession.

MUTUUM:

-the subject matter is money or other consumable thing

-the ownership is transferred to the borrower. The purpose of mutuum is for the borrower to own the
thing loaned and use and consume it;
-may be gratuitous or it may be onerous, that is, with stipulation to pay interest
-the borrower need only pay the same amount of the same kind and quality
- refers only to personal property. If personal property (whether or not consumable) is borrowed not for
the purpose of consumption but for exhibition or display, the contract is commodatum, not mutuum
-a loan for consumption. Use or temporary possession of the thing may or may not include its fruits.
DIFFERENCE: COMMODATUM &
MUTUUM

According to De Leon and De Leon, Jr. (2010), the difference between
commodatum or mutuum becomes relatively simple to see if one bears in mind
eight principal points of distinction as discussed below. But first, Article 1933 of
the New Civil Code provides:

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 ownership of the thing loaned,

while in simple loan, ownership passes to the borrower.
[1] Commodatum ordinarily involves something not consumable (see Art. 1936.),
while in mutuum, the subject matter is money or other consumable thing. It must
be noted that only personal (movable) property can be classified into consumable
or not;

[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. The
purpose of mutuum is for the borrower to own the thing loaned and use and
consume it;

[3] Commodatum is essentially gratuitous, while mutuum may be gratuitous or it

may be onerous, that is, with stipulation to pay interest. If any compensation is
paid by the bailee, the contract is no longer within the concept of commodatum;

[4] In commodatum, the borrower must return the same thing loaned, while in
mutuum, the borrower need only pay the same amount of the same kind and
quality. Money, for example, when it used, parts the owner and, therefore, it is
almost impossible for a bailee in mutuum to return the same cash with the same
series numbers;

[5] Commodatum may involve real or personal property (Art. 1937.), while
mutuum refers only to personal property. If personal property (whether or not
consumable) is borrowed not for the purpose of consumption but for exhibition
or display, the contract is commodatum, not mutuum;

[6] Commodatum is a loan for use or temporary possession (Art. 1935.), while
mutuum is a loan for consumption. Use or temporary possession of the thing may
or may not include its fruits. In commodatum, the parties may stipulate that the
bailee has the right to make use of the fruits of the thing bailed BUT the fruits are
not the main purpose of the contract. Otherwise (i.e. the main purpose of the
contract being the enjoyment by the bailee of the fruits of the thing), the contract
may be classified as one of usufruct.

[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.
Note that this does not mean that the bailor may demand the return of the thing
anytime; there must be an urgent need.
On the other hand, even if there is urgent need or emergency (e.g. hospitalization
of a child, etc.), the bailor in mutuum cannot demand the return of the thing
before the lapse of the period agreed upon. In fact, he cannot go to court for this
purpose.

[8] In commodatum, the loss of the subject matter is suffered by the bailor since
he is the owner (Art. 1942 and 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.

The discussion above is based on an outline by De Leon and De Leon, Jr. (2010).
Their books are available in fine bookstores nationwide. SOURCE: De Leon and
De Leon, Jr. (2010). Comments and Cases on CREDIT TRANSACTIONS. 11th
edition. ISBN 978-971-23-5535-6. Rex Books Store.
https://www.rexestore.com/civil-law-books/1187-comments-cases-on-credit-
transactions-.html

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It can be readily noted from [Article 1933] that in simple loan (mutuum), as
contrasted to commodatum, the borrower acquires ownership of the money,
goods or personal property borrowed. Being the owner, the borrower can dispose
of the thing borrowed (Article 248, Civil Code) and his act will not be considered
misappropriation thereof. (G.R. No. L-50550-52. October 31, 1979)

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In commodatum, the bailor retains the ownership of the thing loaned, while in
simple loan, ownership passes to the borrower.

The foregoing provision seems to imply that if the subject of the contract is a
consumable thing, such as money, the contract would be a mutuum. However,
there are some instances where a commodatum may have for its object a
consumable thing. Article 1936 of the Civil Code provides:

Consumable goods may be the subject of commodatum if the purpose of the

contract is not the consumption of the object, as when it is merely for exhibition.
Thus, if consumable goods are loaned only for purposes of exhibition, or when
the intention of the parties is to lend consumable goods and to have the very
same goods returned at the end of the period agreed upon, the loan is a
commodatum and not a mutuum.

The rule is that the intention of the parties thereto shall be accorded primordial
consideration in determining the actual character of a contract. In case of doubt,
the contemporaneous and subsequent acts of the parties shall be considered in
such determination. (G.R. No. 115324. February 19, 2003)

Distinction Between Commodatum and Mutuum

1. The object of commodatum are Non-consumable (Non-fungible); in Mutuum
Consumable goods.               

2. The cause for commodatum is Gratuitous otherwise it is a lease; in Mutuum it may or

may not be gratuitous.

3. The purpose in commodatum is for use or temporary possession; in mutuum it is for

consumption.

4. The subject matter in commodatum is real or personal property while it is only

personal property in mutuum.

5. The ownership of the thing is retained by the the bailor in commodatum while in
mutuum, it passes to the debtor.

6. The thing to be returned in commodatum is the exact thing loaned while in mutuum, it
is a thing of equal amount of the same kind and quality.

7. In commodatum, it is the bailor who bears the risk of loss; while in mutuum, it is the
debtor.

8. In commodatum, the thing maybe returned even before the expiration of the term in
urgent cases; however, in mutuum, it must be after the expiration of the term.

9. Commodatum is a contract of use while mutuum is a contract of consumption.