Commodatum
Credit Transactions
NATURE OF
COMMODATUM
SECTION 1
Parties
Bailor =
Lender
Bailee =
Borrower
Commodatum
From the Latin commodum = usefulness
The Bailee acquires the use of the thing loaned
The Bailee does not acuire ownership over the thing borrowed
and has the duty to return the same thing to the lender
Commodatum
Article 1935. The bailee in commodatum acquires the use of
the thing loaned but not its fruits; if any compensation is to
be paid by him who acquires the use, the contract ceases to
be a commodatum. (1941a)
Article 1940. A stipulation that the bailee may make use of
the fruits of the thing loaned is valid. (n)
GR: Borrower is not
entitled to the fruits
of the thing
borrowed.
XPN: By stipulation
of the parties (Art.
1940)
FRUITS
Commodatum is essentially
gratuitous. If there’s any
compensation, it ceases to be
a commodatum.
GRATUITOUS
A commodatum is
temporary and usually has a
term or period. It can be a
fixed period, or can depend
on the purpose of the
commodatum.
Term of a Commodatum
Object of Commodatum
Article 1936. 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. (n)
Article 1937. Movable or immovable property may
be the object of commodatum.
Non-consumable
that is either:
Movable
Immovable
Object of
Commodatum
(Art. 1937)
Consumable
GR: Object of
commodatum is
non-consumable
XPN: If the
purpose is not
consumption of the
object (Art. 1936)
Ownership of the Thing Loaned
Article 1938. The bailor in commodatum
need not be the owner of the thing loaned. (n)
The bailor need not be the owner
of the thing but must have the
right to convey the use of the
thing subject of the commodatum.
Nature of Commodatum
Ownership of the Bailor is not
required
The right to possess and
use the thing
The right to transfer such
right to use and possess
Commodatum as purely personal
Article 1939. Commodatum is purely personal in character.
Consequently:
(1) The death of either the bailor or the bailee extinguishes
the contract;
(2) The bailee can neither lend nor lease the object of the
contract to a third person. However, the members of the
bailee's household may make use of the thing loaned, unless
there is a stipulation to the contrary, or unless the nature of
the thing forbids such use. (n)
Commodatum is purely
personal in nature. It is
done for the benefit of the
bailee only.
Personal nature of Commodatum
OBLIGATIONS OF
THE BAILEE
SECTION 2
Obligations of the Bailee
Article 1941. The bailee is obliged to pay for the ordinary expenses for the use and preservation of the
thing loaned. (1743a)
Article 1942. The bailee is liable for the loss of the thing, even if it should be through a fortuitous event:
(1) If he devotes the thing to any purpose different from that for which it has been loaned;
(2) If he keeps it longer than the period stipulated, or after the accomplishment of the use for which the
commodatum has been constituted;
(3) If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation exempting
the bailee from responsibility in case of a fortuitous event;
(4) If he lends or leases the thing to a third person, who is not a member of his household;
(5) If, being able to save either the thing borrowed or his own thing, he chose to save the latter. (1744a and
1745)
Obligations of the Bailee
Article 1943. The bailee does not answer for the deterioration of the
thing loaned due only to the use thereof and without his fault. (1746)
Article 1944. The bailee cannot retain the thing loaned on the ground
that the bailor owes him something, even though it may be by reason of
expenses. However, the bailee has a right of retention for damages
mentioned in article 1951. (1747a)
Article 1945. When there are two or more bailees to whom a thing is
loaned in the same contract, they are liable solidarily. (1748a)
Obligations of the Bailee
– To exercise due diligence while in possession of the thing loaned
– To pay ordinary expenses for the use and preservation of the thing
loaned
– To be responsible for the loss of the thing in the cases specified in Art.
1942
– To be liable for any loss or injury dye to the bailee’s fault or negligence
– To return the thing upon expiration of the term of the contract
Obligations of the Bailee
Bailee must exercise diligence of a good father of
the family in taking care of the object
Bailee is liable for ordinary expenses for
preservation
Bailee is liable for loss of the thing, even if it is
a fortuitous event in instances under Art. 1942
(1) If he devotes the thing to any purpose different from
that for which it has been loaned;
(2) If he keeps it longer than the period stipulated, or after
the accomplishment of the use for which the commodatum
has been constituted;
(3) If the thing loaned has been delivered with appraisal of
its value, unless there is a stipulation exempting the bailee
from responsibility in case of a fortuitous event;
(4) If he lends or leases the thing to a third person, who is
not a member of his household;
(5) If, being able to save either the thing borrowed or his
own thing, he chose to save the latter.
The Bailee is
liable for loss
even if it is
through a
fortuitous event
in the following
cases:
OBLIGATIONS OF
THE BAILOR
SECTION 3
Obligations of the Bailor
Article 1946. The bailor cannot demand the return of the thing loaned till after the expiration
of the period stipulated, or after the accomplishment of the use for which the commodatum has
been constituted. However, if in the meantime, he should have urgent need of the thing, he
may demand its return or temporary use.
In case of temporary use by the bailor, the contract of commodatum is suspended while the
thing is in the possession of the bailor. (1749a)
Article 1947. The bailor may demand the thing at will, and the contractual relation is called a
precarium, in the following cases:
(1) If neither the duration of the contract nor the use to which the thing loaned should be
devoted, has been stipulated; or
(2) If the use of the thing is merely tolerated by the owner. (1750a)
GR: The Bailor cannot demand the
return of the thing loand until after the
expiration of the period stipulated.
XPN: May demand return: In case of
bailor’s urgent need; when the contract
is a precarium; when the bailee
commits acts of ingratitude under Art.
765
Obligation to
Return the
Thing
Urgent Need
Temporary
return of the
thing
Period of
commodatum
is suspended
Precarium
The bailor may demand the return of the thing
at will:
If neither the duration of the contract nor the use to
which the thing loaned should be devoted has been
stipulated; or
If the use of the thing is merely tolerated by the owner
Acts of ingratitude (Art. 765)
(Revocation of Donation)
(1) If the bailee should commit some offense against the
person, the honor or the property of the bailor, or of his wife
or children under his parental authority;
(2) If the bailee imputes to the bailor any criminal offense, or
any act involving moral turpitude, even though he should
prove it, unless the crime or the act has been committed
against the bailee himself, his wife or children under his
authority;
(3) If he unduly refuses him support when the bailee is
legally or morally bound to give support to the bailor.
Obligations of the Bailor
Article 1949. The bailor shall refund the extraordinary expenses during the
contract for the preservation of the thing loaned, provided the bailee brings
the same to the knowledge of the bailor before incurring them, except when
they are so urgent that the reply to the notification cannot be awaited
without danger.
If the extraordinary expenses arise on the occasion of the actual use of the
thing by the bailee, even though he acted without fault, they shall be borne
equally by both the bailor and the bailee, unless there is a stipulation to the
contrary. (1751a)
Article 1950. If, for the purpose of making use of the thing, the bailee incurs
expenses other than those referred to in articles 1941 and 1949, he is not
entitled to reimbursement. (n)
EXPENSES
EXPENSES
WHO IS LIABLE
Ordinary Expenses for the Use
and Preservation of the Thing
Bailee
Extraordinary Expenses for
Preservation
Bailor
Extraordinary Expenses arising Equally by the bailor and bailee
on the occasion of actual use of
the thing by the bailee (even
without the bailee’s fault)
Obligations of the Bailor
Article 1951. The bailor who, knowing the flaws of
the thing loaned, does not advise the bailee of the
same, shall be liable to the latter for the damages
which he may suffer by reason thereof. (1752)
Hidden Defects
There is a hidden defect in the thing borrowed
The bailor is aware of the hidden defect
The bailee is not aware of the hidden defect
The bailor did not notify the bailee of the hidden defect
The bailee suffered damages by reason of the hidden defect
Obligations of the Bailor
Article 1952. The bailor cannot exempt himself
from the payment of expenses or damages by
abandoning the thing to the bailee.
The bailor cannot abandon the
thing subject of the commodatum
in lieu of the payment of expenses
or damages to the bailee.
Extinguishment of Commodatum
– Expiration of the term agreed upon
– Accomplishment of the stipulated purpose or use of the thing
– Return of the thing with the consent of the bailor
– Return of the thing in case the agreement is precarium
– Return of the thing for acts of ingratitude
– Death of a party