DEPOSIT
BY: COMM. JOHN A. AGBAYANI
1
DEPOSIT IN GENERAL & KINDS (1962-1967)
Defined- A contract constituted from the moment a
person receives a thing belonging to another, with the
obligation of safely keeping it and of returning the
same.(1962)
Kinds of Deposit:
Judicial (Sequestration) –takes place when an
attachment or seizure of property in litigation is
ordered.
Extra-judicial
Voluntary – one wherein the delivery is made by the
will of the depositor or by two or more persons each of
whom believes himself entitled to the thing deposited.
(Arts 1968 – 1995)
Necessary – one made in compliance with a legal
obligation, or on the occasion of any calamity, or by
travellers in hotels and inns (Arts 1996 - 2004), or by
travellers with common carriers (Art 1734 – 1735).
NOTE: The chief difference between a voluntary
deposit and a necessary deposit is that in the former,
the depositor has a complete freedom in choosing the
depositary, whereas in the latter, there is lack of free
choice in the depositor.
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Article 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)
Article 1963. An agreement to constitute a
deposit is binding, but the deposit itself is not
perfected until the delivery of the thing. (n)
Article 1964. A deposit may be constituted
judicially or extrajudicially. (1759)
Article 1965. A deposit is a gratuitous contract,
except when there is an agreement to the
contrary, or unless the depositary is engaged in
the business of storing goods. (1760a)
Article 1966. Only movable things may be the
object of a deposit. (1761)
Article 2006. Movable as well as immovable
property may be the object of sequestration.
(1786)
Article 1967. An extrajudicial deposit is either
voluntary or necessary. (1762)
Judicial
Extra-judicial
1. Creation
Will of the court
Will of the parties or contract
2. Purpose
Security or to insure the right of a
Custody and safekeeping
party to property or to recover in case
of favorable judgment
3. Subject Matter
Movables or immovables,
but generally immovables
Movables only
4. Cause
Always onerous
May be compensated or not, but generally
gratuitous
5. When must the thing be returned
Upon order of the court or when
litigation is ended
Upon demand of depositor
Person who has a right
Depositor or third person designated
6. In whose behalf it is held
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Deposit
1. Purpose
Mutuum
Principal purpose is safekeeping or
custody
Principal purpose is consumption
Depositor can demand the return of
the subject matter at will
The lender must wait until the
expiration of the period granted to the
debtor
2. When to Return
3. Subject Matter
Subject matter may be movable or
immovable property
Subject matter is only money or other
fungible thing
Relationship is that of lender
(creditor) and borrower (debtor).
Relationship is that of depositor and
depositary.
4. Relationship
5. Compensation
There can be compensation of
credits.
4
NO compensation of things deposited
with each other (except by mutual
agreement).
DEPOSIT IN GENERAL & KINDS (1962-1967)
Voluntary Deposit is created by will of
the Parties thru Contracts.
Article
1966
does
not
embrace
incorporeal property, such as rights and
actions, for it follows the person of the
owner, wherever he goes.
As a general rule, deposit only covers
movable property. However, in the case
of a judicial deposit, it can cover
immovable property (Art. 2006). Thus:
A judgment creditor can attach or execute
both personal and real properties of a
judgment debtor.
Article 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)
Article 1966. Only movable
things may be the object of a
deposit. (1761)
Article 2006. Movable as well
as immovable property may be
the object of sequestration.
(1786)
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VOLUNTARY DEPOSIT-GENERAL PROVISIONS (1968-1971)
Voluntary Deposit is created by will of
the Parties thru Contracts.
Article
1966
does
not
embrace
incorporeal property, such as rights and
actions, for it follows the person of the
owner, wherever he goes.
(CA Agro vs CA, 219 SCRA 426)
A contract for the rent of safety deposit
boxes is not an ordinary contract of lease
of things but a special kind of deposit
under the GBL; hence, it is not to be strictly
governed by the provisions on Deposit.
The relation between a bank and its
customer is that of a bailor and bailee. (CA
Agro vs CA, 219 SCRA 426). It is one of
the powers of a bank under the General
Banking Law (S 53, GBL). 2 keys are
issued: 1 for the bank and 1 for the
depositor. Hence, one does not have full
control of the box unlike in lease where the
renter is in possession of the premises.
6
Article 1968. A voluntary deposit is that wherein the
delivery is made by the will of the depositor. A
deposit may also be made by two or more persons
each of whom believes himself entitled to the thing
deposited with a third person, who shall deliver it in a
proper case to the one to whom it belongs. (1763)
Article 1969. A contract of deposit may be entered
into orally or in writing. (n)
Article 1970. If a person having capacity to contract
accepts a deposit made by one who is incapacitated,
the former shall be subject to all the obligations of a
depositary, and may be compelled to return the thing
by the guardian, or administrator, of the person who
made the deposit, or by the latter himself if he should
acquire capacity. (1764)
Article 1971. If the deposit has been made by a
capacitated person with another who is not, the
depositor shall only have an action to recover the
thing deposited while it is still in the possession of
the depositary, or to compel the latter to pay him the
amount by which he may have enriched or benefited
himself with the thing or its price. However, if a third
person who acquired the thing acted in bad faith, the
depositor may bring an action against him for its
recovery. (1765a)
VOLUNTARY DEPOSIT-GENERAL PROVISIONS (1968-1971)
Deposit in Sale- Earnest Money is not a deposit under Art.
1482 of the Civil Code. It is part of the purchase price.
Deposit in Lease- It is not a deposit under 1966 because it
is not for safekeeping but as security for damages.
Deposit by Students- It is not a deposit but a Loan
Arrastre Operator- It is a Deposit for a fee (Onerous)
Escrow Deposit- It is a Deposit
Free Valet Parking in a restaurant- It is a Deposit (Triple V
vs. Fil Merchant
Valet Parking in a hotel- When a car key is turned over to an
attendant, deposit is perfected.
(Durban v Pioneer GR 179419 1-2-2011.
Calibo v CA- Tractor in a house is a deposit not pledge.
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NECESSARY DEPOSIT
Article 1996. A deposit is necessary:
(1) When it is made in compliance with a legal obligation;
(2) When it takes place on the occasion of any calamity, such as fire, storm, flood, pillage, shipwreck, or
other similar events. (1781a)
Article 1997. The deposit referred to in No. 1 of the preceding article shall be governed by the provisions of the
law establishing it, and in case of its deficiency, by the rules on voluntary deposit.
The deposit mentioned in No. 2 of the preceding article shall be regulated by the provisions concerning voluntary
deposit and by article 2168. (1782)
Article 1998. The deposit of effects made by travelers in hotels or inns shall also be regarded as necessary. The
keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or
to their employees, of the effects brought by the guests and that, on the part of the latter, they take the
precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.
(1783)
Article 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or
placed in the annexes of the hotel. (n)
Article 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the
personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as
strangers; but not that which may proceed from any force majeure. The fact that travelers are constrained to rely
on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required
of him. (1784a)
Article 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is
done with the use of arms or through an irresistible force. (n)
Article 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his
family, servants or visitors, or if the loss arises from the character of the things brought into the hotel. (n)
Article 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is
not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby
the responsibility of the former as set forth in articles 1998 to 2001 is suppressed or diminished shall be void. (n)
Article 2004. The hotel-keeper has a right to retain the things brought into the hotel by the guest, as a security
for credits on account of lodging, and supplies usually furnished to hotel guests. (n)
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NECESSARY DEPOSIT
1. Made in compliance with a legal
obligation
2. Made on the occasion of any calamity
such as fire, storm, flood, pillage, shipwreck
or other similar events (deposito miserable)
3. Made by travelers in hotels and inns or by
travelers with common carrier
Deposit by Travelers in hotels and inns:
The keepers of hotels or inns shall be
responsible as depositaries for the deposit of
effects made by travelers provided:
1. Notice was given to them or to their
employees of the effects brought by the
guest; and
Article 1998. The deposit of effects made by
travelers in hotels or inns shall also be
regarded as necessary. The keepers of hotels
or inns shall be responsible for them as
depositaries, provided that notice was given to
them, or to their employees, of the effects
brought by the guests and that, on the part of
the latter, they take the precautions which said
hotel-keepers or their substitutes advised
relative to the care and vigilance of their
effects. (1783)
Article 1999. The hotel-keeper is liable for the
vehicles, animals and articles which have been
introduced or placed in the annexes of the
hotel. (n)
Article 2000. The responsibility referred to in
the two preceding articles shall include the loss
of, or injury to the personal property of the
guests caused by the servants or employees of
the keepers of hotels or inns as well as
strangers; but not that which may proceed from
any force majeure. The fact that travelers are
constrained to rely on the vigilance of the
keeper of the hotels or inns shall be considered
in determining the degree of care required of
him. (1784a)
Article 2001. The act of a thief or robber, who
has entered the hotel is not deemed force
majeure, unless it is done with the use of arms
or through an irresistible force. (n)
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NECESSARY DEPOSIT
2. The guests take the precautions which
said hotel-keepers or their substitutes
advised relative to the care and vigilance of
their effects.
-Liability extends to vehicles, animals and
articles which have been introduced or
placed in the annexes of the hotel.
-Liability shall EXCLUDE losses which
proceed from force majeure. The act of a
thief or robber is not deemed force majeure
unless done with the use of arms or
irresistible force.
The hotel-keeper cannot free himself from
the responsibility by posting notices to the
effect that he is not liable for the articles
brought by the guest. Any stipulation to
such effect shall be void.
10
Article 1998. The deposit of effects made by
travelers in hotels or inns shall also be
regarded as necessary. The keepers of hotels
or inns shall be responsible for them as
depositaries, provided that notice was given to
them, or to their employees, of the effects
brought by the guests and that, on the part of
the latter, they take the precautions which said
hotel-keepers or their substitutes advised
relative to the care and vigilance of their
effects. (1783)
Article 1999. The hotel-keeper is liable for the
vehicles, animals and articles which have been
introduced or placed in the annexes of the
hotel. (n)
Article 2000. The responsibility referred to in
the two preceding articles shall include the loss
of, or injury to the personal property of the
guests caused by the servants or employees of
the keepers of hotels or inns as well as
strangers; but not that which may proceed from
any force majeure. The fact that travelers are
constrained to rely on the vigilance of the
keeper of the hotels or inns shall be considered
in determining the degree of care required of
him. (1784a)
Article 2001. The act of a thief or robber, who
has entered the hotel is not deemed force
majeure, unless it is done with the use of arms
or through an irresistible force. (n)
SEQUESTRATION OR JUDICIAL DEPOSIT
Article 2005. A judicial deposit or
sequestration takes place when an
attachment or seizure of property in litigation
is ordered. (1785)
Examples of Judicial Deposit
Article 2006. Movable as well as immovable
property may be the object of sequestration.
1. Attachment
(1786)
2. Execution
Article 2007. The depositary of property or
3. Receivership
objects sequestrated cannot be relieved of
4. Replevin
his responsibility until the controversy which
gave rise thereto has come to an end, unless
5. Sequestrations by Special Law such as
those made by PCGG under E.O No. 1 & 2. the court so orders. (1787a)
Article 2008. The depositary of property
sequestrated is bound to comply, with
respect to the same, with all the obligations
of a good father of a family. (1788)
Article 2009. As to matters not provided for
in this Code, judicial sequestration shall be
governed by the Rules of Court. (1789a)
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OBLIGATIONS OF A DEPOSITARY (1972-1991)
1. OBLIGATION TO SAFEKEEP
To keep the thing safely (Art 1972)
Exercise over the thing deposited the same diligence as he would
exercise over his property:
GRATUITUOUS- DUE DILIGENCE
ONEROUS- EXRAORDIANRY DILIGENCE
Article 1972. The
depositary is obliged to keep
the thing safely and to return
it, when required, to the
depositor, or to his heirs and
2. OBLIGATION TO RETURN
successors, or to the person
To return the thing (Art 1972)
who may have been
designated in the contract.
Person to whom the thing must be returned:
a. Depositor, to his heirs and successors, or the person who may His responsibility, with regard
to the safekeeping and the
have been designated in the contract
loss of the thing, shall be
b. If the depositary is capacitated - he is subject to all the
governed by the provisions
obligations of a depositary whether or not the depositor is
capacitated. If the depositor is incapacitated, the depositary must of Title I of this Book.
return the property to the legal representative of the incapacitated If the deposit is gratuitous,
or to the depositor himself if he should acquire capacity (Art 1970). this fact shall be taken into
If the depositor is capacitated and the depositary is incapacitated - account in determining the
the latter does not incur the obligation of a depositary but he is
degree of care that the
liable:
depositary must observe.
i. to return the thing deposited while still in his possession;
(1766a)
ii. to pay the depositor the amount which he may have benefited
himself with the thing or its price subject to the right of any third
person who acquired the thing in good faith (Art 1971)
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OBLIGATIONS OF A DEPOSITARY (1972-1991)
2. OBLIGATION TO RETURN
Time of return:
a. Upon demand even though a specified period or time
for such return may have been fixed except when the
thing is judicially attached while in the depositary’s
possession or should he have been notified of the
opposition of a third person to the return or the removal
of the thing deposited. (Art 1998)
b. If deposit gratuitous, the depositary may return the
thing deposited notwithstanding that a period has been
fixed for the deposit if justifiable reasons exists for its
return.
If the deposit is for a valuable consideration, the
depositary has no right to return the thing deposited
before the expiration of the time designated even if he
should suffer inconvenience as a consequence.(Art
1989)
What to return: product, accessories, and accessions
of the thing deposited (Art 1983)
Article 1972. The
depositary is obliged to keep
the thing safely and to return
it, when required, to the
depositor, or to his heirs and
successors, or to the person
who may have been
designated in the contract.
His responsibility, with regard
to the safekeeping and the
loss of the thing, shall be
governed by the provisions
of Title I of this Book.
If the deposit is gratuitous,
this fact shall be taken into
account in determining the
degree of care that the
depositary must observe.
(1766a)
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OBLIGATIONS OF A DEPOSITARY (1972-1991)
3. OBLIGATION NOT TO DEPOSIT TO THIRD
PARTYNot to deposit the thing with a third person unless
authorized by express stipulation (Art 1973)
The depositor is liable for the loss of the thing deposited
under Article 1973 if:
- he transfers the deposit with a third person without
authority although there is no negligence on his part and
the third person;
- he deposits the thing with a third person who is
manifestly careless or unfit although authorized even in
the absence of negligence; or
-the thing is lost through the negligence of his employees
whether the latter are manifestly careless or not.
4. OBLIGATION TO CHANGE THE WAY OF THE
DEPOSIT
If he could reasonably presume that the depositor
would consent . However, before the depositary may
make such change, he shall notify the depositor thereof
and wait for his decision, unless delay would cause
danger.
14
Article 1973. Unless there is a
stipulation to the contrary, the
depositary cannot deposit the
thing with a third person. If
deposit with a third person is
allowed, the depositary is liable
for the loss if he deposited the
thing with a person who is
manifestly careless or unfit. The
depositary is responsible for the
negligence of his employees. (n)
Article 1974. The depositary
may change the way of the
deposit if under the
circumstances he may reasonably
presume that the depositor
would consent to the change if
he knew of the facts of the
situation. However, before the
depositary may make such
change, he shall notify the
depositor thereof and wait for his
decision, unless delay would
cause danger. (n)
OBLIGATIONS OF A DEPOSITARY (1972-1991)
5. OBLIGATION TO COLLECT INTEREST
If the thing deposited should earn interest
(Art 1975):
-to collect interest and the capital itself as it
fall due
-to take steps to preserve its value and rights
corresponding to it
6. OBLIGATION NOT TO COMMINGLE
GRAIN OF VARIOUS DEPOSITORS
Not to commingle things deposited if so
stipulated (Art 1976)
Article 1975. The depositary holding
certificates, bonds, securities or
instruments which earn interest shall
be bound to collect the latter when it
becomes due, and to take such steps
as may be necessary in order that the
securities may preserve their value and
the rights corresponding to them
according to law.
The above provision shall not apply to
contracts for the rent of safety deposit
boxes. (n)
Article 1976. Unless there is a
stipulation to the contrary, the
depositary may commingle grain or
other articles of the same kind and
quality, in which case the various
depositors shall own or have a
proportionate interest in the mass. (n)
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OBLIGATIONS OF A DEPOSITARY (1972-1991)
7. OBLIGATION NOT TO USE
Not to make use of the thing deposited unless authorized
(Art 1977)
þGENERAL RULE: Deposit is for safekeeping of the subject
matter and not for use.
þEXCEPTIONS:
-When the preservation of the thing deposited requires its use
-When authorized by the depositor
NOTE: The permission to use is NOT presumed except when
such use is necessary for the preservation of the thing
deposited.
Effect if permission to use is given (Art 1978):
1. If thing deposited is non-consumable, the contract loses the
character of a deposit and acquires that of a commodatum
despite the fact that the parties may have denominated it as a
deposit, unless safekeeping is still the principal purpose.
2. If thing deposited consists of money/consumable things, the
contract is converted into a simple loan or mutuum unless
safekeeping is still the principal purpose in which case it is
called an irregular deposit. Example: bank deposits are
irregular deposits in nature but governed by law on loans.
16
Article 1977. The
depositary cannot make use
of the thing deposited
without the express
permission of the depositor.
Otherwise, he shall be liable
for damages.
However, when the
preservation of the thing
deposited requires its use, it
must be used but only for
that purpose. (1767a)
Article 1978. When the
depositary has permission to
use the thing deposited, the
contract loses the concept of
a deposit and becomes a
loan or commodatum, except
where safekeeping is still the
principal purpose of the
contract.
The permission shall not be
presumed, and its existence
must be proved. (1768a)
OBLIGATIONS OF A DEPOSITARY (1972-1991)
8. To be liable for loss through
fortuitous event (SUDA):
1. if Stipulated
2. if he Uses the thing without the depositor's permission
3. if he Delays its return
4. if he Allows others to use it, even
though he himself may have been
authorized to use the same
Article 1979. The depositary is
liable for the loss of the thing
through a fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing without
the depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it,
even though he himself may
have been authorized to use the
same. (n)
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OBLIGATIONS OF A DEPOSITARY (1972-1991)
9. DUTY TO RETURN ARTICLES IN
A SEALED BOXWhen the thing deposited is delivered
sealed and closed :
1. to return the thing deposited in the
same condition
2. to pay for damages should the seal
or lock be broken through his fault,
which is presumed unless proved
otherwise
3. to keep the secret of the deposit
when the seal or lock is broken with or
without his fault (Art 1981)
NOTE: The depositary is authorized to
open the thing deposited which is
closed and sealed when (Art 1982):
1. there is presumed authority
2. when the key has been delivered to
him or the instructions of the depositor
cannot be done without opening it)
3. necessity
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Article 1981. When the thing deposited is
delivered closed and sealed, the depositary must
return it in the same condition, and he shall be
liable for damages should the seal or lock be
broken through his fault.
Fault on the part of the depositary is presumed,
unless there is proof to the contrary.
As regards the value of the thing deposited, the
statement of the depositor shall be accepted,
when the forcible opening is imputable to the
depositary, should there be no proof to the
contrary. However, the courts may pass upon the
credibility of the depositor with respect to the
value claimed by him.
When the seal or lock is broken, with or without
the depositary's fault, he shall keep the secret of
the deposit. (1769a)
Article 1982. When it becomes necessary to
open a locked box or receptacle, the depositary
is presumed authorized to do so, if the key has
been delivered to him; or when the instructions
of the depositor as regards the deposit cannot be
executed without opening the box or receptacle.
(n)
OBLIGATIONS OF A DEPOSITARY (1972-1991)
Fixed, savings, and current deposits of money in banks and similar
institutions shall be governed by the provisions concerning simple loan.
(Art 1980)
The general rule is that a bank can compensate or set off the deposit in
its hands for the payment of any indebtedness to it on the part of the
depositor. In true deposit, compensation is not allowed.
Irregular Deposit
Mutuum
1. The consumable thing
deposited may be demanded at
will by the depositor
1. Lender is bound by the provisions
of the contract and cannot demand
restitution until the time for
payment, as provided in the contract,
has arisen
2. The only benefit is that which
accrues to the depositor
2. Essential cause for the transaction
is the necessity of the borrower
3. The irregular depositor has a
preference over other creditors
with respect to the thing
deposited
3. Common creditors enjoy no
preference in the distribution of the
debtor’s property
Article 1980.
Fixed, savings,
and current
deposits of
money in banks
and similar
institutions shall
be
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OBLIGATIONS OF A DEPOSITOR (1992-1995)
1. To pay expenses for preservation
If the deposit is gratuitous, the depositor is
obliged to reimburse the depositary for
expenses incurred for the preservation of the
thing deposited (Art 1992)
If the deposit is for valuable consideration,
expenses for preservation are borne by the
depositary unless there is a contrary
stipulation
2. To pay loses incurred by the depositary
due to the character of the thing deposited:
þGENERAL RULE: The depositor shall reimburse
the depositary for any loss arising from the
character of the thing deposited.
þEXCEPTIONS:
1. at the time of the deposit, the depositor was not
aware of the dangerous character of the thing
2. when depositor was not expected to know the
dangerous character of the thing
3. when the depositor notified the depository of the
same
4. the depositary was aware of it without advice
from the depositor
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Article 1992. If the deposit is gratuitous,
the depositor is obliged to reimburse the
depositary for the expenses he may have
incurred for the preservation of the thing
deposited. (1779a)
Article 1993. The depositor shall
reimburse the depositary for any loss
arising from the character of the thing
deposited, 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. (n)
Article 1994. The depositary may retain
the thing in pledge until the full payment of
what may be due him by reason of the
deposit. (1780)
Article 1995. A deposit its extinguished:
(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. (n)
OBLIGATIONS OF A DEPOSITOR (1992-1995)
Art 1994- RIGHT OF RETENTION IN DEPOSIT
As distinguished from the right of retention of the
borrower in commodatums DISTINGUISHED FROM THE
RIGHT OF, the depositary is constituted as pledgee by
operation of law which grants him the right to foreclose
the thing deposited in case of non-payment of the any
amount due him such as expenses for preservation and
extraordinary expenses.
Article 1994. The
depositary may
retain the thing in
pledge until the full
payment of what
may be due him by
reason of the
deposit. (1780)
Pls note that the law states that the right of retention is
in pledge. In Commodatum, there is no such retention in
pledge.
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OBLIGATIONS OF A DEPOSITOR (1992-1995)
Extinguishment of Voluntary
Deposit (Art 1995)
1. Loss or destruction of the thing
deposited
2. In case of gratuitous deposit, upon
the death of either the depositor or the
depositary
3. Other causes, such as return of the
thing, novation, merger, expiration of
the term fulfilment of the resolutory
condition, etc. (Art 1231)
22
Article 1995.
A deposit its extinguished:
(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. (n)