Make-up Class – March 3, 2023 – Credit

Deposit:

Contract constituted the moment a person receives a thing that belong to another

Obligation of depository is to safely keep the object and return the same; if it’s not the principal thing is
the safekeeping.

Bank Deposit – Not a contract of deposit; it is a contract of loan.

Perfected when the delivery of the object of deposit – a real contract

Consensual contract of Deposit – agreement enter into deposit in the future.

Deposit is an example of a bailment agreement; mutual benefit if there is compensation in safe-keeping

A sole benefit of the bailor/depositor if it is not compensated.

Can the depository GR cannot use the object XPN if permitted by the depositor through an express
permission, cannot be used by 3rd persons – he will be liable for the loss even if fortuitous

Needs to be used through preservation of the object – the use is limited for the purpose of preservation
only even without permission.

Can the depository deposit to a 3rd person depository – No, liable for damages and loss of the object
even in fortuitous event. Unless expressly stipulated. Since there is an element of trust. If allowed, when
object is lost, then the 3rd person depository is the one liable, however, even if the depository is allowed
to redeposit, if the 3rd depository is careless and manifestly unfit 2) if the person is the employee of the
1st depository. Art. 1973

Usage is incidental – still a contract of deposit.

If the depository is allowed to use the object as a principal purpose, then the deposit becomes a
commodatum.

Judicial Deposit – property subject to litigation

Extrajudicial Deposit

- Voluntary Deposit – entered into by will of the agreement of the parties

- Necessary Deposit – entered into by circumstances, legal obligation, calamities, made in

hotels, and in common carrier.

Characteristics of a Deposit

Principal purpose – safekeeping in order to prevent damaged or loss

Depository is exclusive use if allowed.

The object subject of the deposit is exclusive to moveable object; since these are the only subject to
loss, damages, or loss.
Generally gratuitous but can be onerous

1. if compensated upon agreement by parties

2. if the depository is in the business of storing goods

Bilateral or unilateral

1. Unilateral if gratuitous

2. Bilateral if has compensation.

Safely keep a real property? A land?

- if compensation is paid for safekeeping – lease of service contract

- if gratuitous – innominate contract; without compensation akin to a deposit

Voluntary Deposit

- will by the depository to deposit moveable objects

- may be entered into by writing or verbally as long as there is meeting of the minds.

Capacity

1. Depositary is capacitated + incapacitated depositor = remains to be obliged to perform obligations by

the depository (Art. 1970)

Voidable – valid until annulled

2. Depositor capacity then incapacitated = thing is returned to the administrator, legal guardian

3. Depositary incapacitated + capacitated depositor = contract is voidable; depositor has the right to
recover the thing only when it is in the possession of the depositary, if not, then the depositor has the
right to recover in the amount for which the depositary has benefitted from the thing.

Unfair? For the amount benefitted only not on the actual amount? Yes, but the risk that you took that
you entered into with an incapacitated party/depositary. Nonetheless, the law gives you a remedy to go
against 3rd party when there is bad faith who acquires the property from the depositary = action for
recovery.

Depositary

Obligations – Art. 1972

Agro Case – discusses the nature of a safety deposit box – a special kind of deposit since it does not fully
fall in the civil law of deposit. It also interacts with banking laws.

Certificates, bonds (instruments that earn interest) – obligations of the depositary needs it to be
updated for the safely keeping and to collect what is due. Otherwise it will lose or deteriorate in value,
and deliver everything that has been received to the depositor

Depositary liable even in fortuitous event in certain cases

In a closed receptacle – obligation is to preserve it and return in the same seal

Fault is always presumed in the depositary unless the contrary is proved.

If the object is delivered locked and sealed, and the seal is broken. The valuation by the depositor is
given preference.

Look inside what is the box to carry out the instruction of the depositor

The object has to be returned with its accessions, accessory e.g. interests.

Can the depository demand proof of ownership by the depositor?

No, since ownership is not material nor transferred.

Ownership is only material if there is doubt to the ownership. If stolen, or knows who the true owner is
– the depositary must advice the true owner of the object and wait for a month for the true owner to
act with the information given by the depositary, if the true owner does not do anything, the depositary
is free to return the object to the depositor free from liabilities under the anti-fencing law.

If the party stipulates 2 years of safekeeping – he has to respect that. The depositary can only return
prior the expiration of period if there is doubt as true the owner;

- when the object was stolen, with notification to the latter, and does not do anything, he can
return the object.

- if there is reasonably ground to believe that the object has not been lawfully acquired.

Commodatum v. Deposit

- object for the use of the bailee is to be returned after expiration of period v. deposit can be demanded
anytime prior to the expiration of period

XPN. Depositary refuse to return, when there is judicial attachment

When depositary is notified by the opposition of the 3 rd person with claim of ownership, he can consign
it in court for the latter to decide on ownership

Right of Retention – the law allows to retain pending payment the expenses that is reimbursable in the
depositary. Nonpayment converts the contract to Art. 2121-2122 – Pledge

Public auction one month after demand of payment. If no public auction within one month, then he has
to return the object to the depositor, but can still collect the sum of money for the preservation.

Obligations of Depositor

If gratuitous – reimburse of the expenses to be incurred by the depositary since it is for preservation;
any loss by the depositary subject to the object deposited Unless… unless at the time of the constitution
of the deposit the former was not aware of, or was not expected to know the dangerous character of
the thing, or unless he notified the depositary of the same, or the latter was aware of it without advice
from the depositor.
Deposit is extinguished

- expiration of term

- demand for the return

- mutual withdrawal

- loss of the thing

- death of any party

Necessary Deposit – entered into by reason of the circumstances

In compliance with a legal obligation – cash deposits made by govt officials, for the use of firearms, SPL
for you to exercise an obligation

Deposit on the occasion of a calamity e.g. fire, earthquake…

GR: deposit is gratuitous unless there is a compensation or if the depositary is in the business of storing
goods. And when the object is saved by a person, he becomes the depositary and is reimbursed in the
safekeeping of the object by the owner or depositor of the thing.

Liability of Inns, Hotels – loss or injury if the thing of the traveler must be caused by the employees of
the hotel, if by stranger – liability is still with the hotel unless the stranger uses force upon things, or
through force majeure, that is When the thief or robber uses arms or irresistible force.

Liability of the hotel attaches only upon concurrence of 2 things 1) traveler has notified of the contents
brought in 2) traveler complied of safety guidelines of the hotel

Loss or damages caused by a relative of the traveler – hotel is not liable.

Hotels will not be relieved by simply posting a disclaimer. Sign a waiver of loss is void.

Nonpayment of the reimbursement of depositor – retain the object when traveler fails to pay the bills
with the hotel, public auction.