Commodatum Mutuum Deposit Lease

COMMODATUM

MUTUUM

DEPOSIT

LEASE

Definition

A contract of loan where the bailor delivers to the bailee a non-consumable thing so that the latter may use it for a certain time and return the identical thing.

It 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.

An agreement whereby the lessor binds himself to grant temporarily the enjoyment or use of the thing or to render some work or service to the lessee who undertakes to pay rent, compensation or price therefor.

Purpose

Transmission of the enjoyment or use of the thing to another for a certain time; loan for use or temporary possession. Non-Fungible Things

A contract of loan where the lender delivers to the borrower money or other consumable or fungible thing thereof upon the condition that the latter shall pay the same amount  of the same kind and quality, with or without  interest. Loan for consumption of  the subject matter.

Safekeeping or custody of the thing delivered; not for the use of the thing deposited.

Renting out of the thing for consideration.

Money or any Fungible Thing

Fungible Things

Non-Fungible Things. Fungible things which are consumed by use cannot be the subject matter of lease.

Subject Matter

other

or

Non-fungible

Generally, non-consumable Consumable thing thing. However, consumable thing may be the subject of  commodatum if the purpose of the contract is not the consumption of the object, but for its exhibition.

Consumable or consumable thing

Movable property

Movable or immovable property. If it is extrajudicial, only movable things.

or

Real and/or Property

immovable

Movable property

Personal

Personal Property

non-

Real and/or Personal Property

Non-consumable thing except when they are merely to be exhibited or when they are accessory to an industrial establishment.

Both movable immovable property Real and/or Property

and

Personal

Nature

Consensual contract and therefore, binding upon the parties but it is only after delivery, will the contract of  loan arise. Purely a Personal Contract 

Consensual contract and therefore, binding upon the parties but it is only after delivery, will the contract of  simple loan arise. Real Contract (perfected upon the delivery of the thing)

Consensual Contract (future deposit) agreement between the parties is binding and enforceable upon the parties. Real Contract (perfected upon the delivery of the thing)

Unilateral Contract. However, when the deposit is for Unilateral Contract  Unilateral Contract  compensation, the juridical (because once the subject  (because once the subject  relation created becomes a matter has been delivered, matter has been delivered, bilateral contract. it creates obligations on the it creates obligations on the part of only one of the part of only one of the parties, i.e. borrower) parties, i.e. borrower) May be Gratuitous. Deposit is NOT gratuitous: Essentially gratuitous May be gratuitous or with a 1. When there is stipulation or it may be stipulation; onerous, that is with 2. Depositary is engaged stipulation to pay interest. in business of storing goods; 3. Property saved from destruction without  knowledge of the owner.

Personal Right 

Kinds

Personal Right. It is a Real Right in case of judicial deposit.

Personal Right 

1. Ordinary Commodatum Simple loan - The bailor cannot  just demand the As to Interest: return of the thing at  1. Simple will because there is - Certain

rate

Consensual Contract 

1. Judicial - There is a court order for attachment or seizure of property in litigation.

Bilateral Contract 

An Onerous contract since compensation is to be paid by the lessee who acquires the use of the thing, although rent may subsequently be condoned or remitted

A personal right. It is a real right only by exception as in the case of lease of real estate recorded in the Registry of Property which makes it binding upon third persons, like a purchaser 4. Lease of things or property whether movable or immovable 5. Lease of work  6. Lease of service

a period agreed upon which must be respected. 2. Precarium - The bailor may demand the thing loaned at will. Thus, the bailee is bound to return the thing upon the demand of  the bailor. A. if neither the duration of the contract nor the use to which the thing loaned should be devoted, has been stipulated or B. if the use of the thing is merely tolerated by the owner.

stipulated in writing by the parties. 2. Compound - Interest which is imposed upon the accrued interest. 3. Legal - Law directs to be paid in the absence of any agreement. a. Monetary Interest  - Interest may be paid either as compensation for the use of the money. b. Compensatory Interest  Imposed by law or by courts as penalty or indemnity for damages.

2. Extrajudicial a. Voluntary - the delivery is made by the will of  the depositor or by two or more persons each of  which believes himself entitled to the thing deposited; free to choose his depositary b. Necessary made in compliance with the legal obligation, or on the occasion of any calamity, or by travelers in hotels, and inns; lack of free choice on the depositor

Parties 

Giver; the party who delivers the possession or custody of the thing:

Bailor

Creditor/Obligee

Depositary

Lessor/Landlord



Recipient; the party who receives the possession or custody of the thing thus delivered:

Bailee

Debtor/Obligor

Depositor

Lessee/Tenant 

Manner of Execution

Can be orally or in writing

For whose benefit?

It confers benefit to the

Can be orally or in writing. In case of interest, the same shall be made in writing. For the benefit of the

Can be orally or in writing

Can be orally or in writing

The only benefit is that which

For the benefit of both the

Rights and Obligations

recipient (bailee).

debtor. Essential cause for the transaction is the necessity of the borrower.

On the part of the BAILOR: Generally, The bailor cannot  just demand the return of  the thing at will because there is a period agreed upon which must be respected or after the accomplishment of the use for which the commodatum has been constituted. However, the bailor may demand the return its temporary use of the thing loaned in the meantime before the expiration of the term in case of urgent need of the thing or in case of   precarium. In the case of temporary use by the bailor, the contract of commodatum is suspended while the thing is in the possession of the bailor.

On the part of the CREDITOR/OBLIGEE: The lender may not demand its return before the lapse of the term agreed upon.

The bailor is naturally entitled to the fruits of the thing. The bailor retains the ownership of the loaned.

The bailor need not be the owner of the thing loaned.

accrues to the depositor

On the part of the DEPOSITOR 1. To pay expenses for preservation (contemplates ordinary and extraordinary expenses) a. If the deposit is Common creditors enjoy no gratuitous, the preference in the depositor is obliged to distribution of the debtor’s reimburse the property. depositary for expenses incurred for the preservation of the thing deposited; b. If the deposit is for the valuable consideration, expenses for preservation are borne by the depositary The creditor receives the unless there is a contrary stipulation “payment” for his loan 2. To pay the losses incurred by the depositary due to the character of the thing deposited. General rule: the depositor shall reimburse the depositary for any loss arising from the The obligee transfers the character of the thing ownership of the thing to deposited. the obligor. Exceptions: a. At the time of the deposit, Creditor must be owner of  the depositor was not  the thing loaned. aware of the dangerous character of the thing;

lessor and the lessee. For the lessor, with respect to the rents while for the lessee, with respect to the use of the thing. On the part of the LESSOR: deliver the thing  To which is the object of the contract in such conditions as to render it  fit for the use intended;  To make on the same during the lease all the necessary repairs in order to keep it suitable for the use to which it  has been devoted, unless there is a stipulation to the contrary;  To maintain the lessee in the peaceful and adequate enjoyment of  the lease for the entire duration of the contract  The owner of the property reneted receives “compensation” or “price” either in money provisions, chattels, or labor from the occupant thereof in return for its use.

The lessor retains the ownership of the thing leased. Generally, the lessor must  be the owner of the thing leased. However, the lessor

In an ordinary commodatum, the bailor may demand the immediate return of the thing if the bailee commits any acts of  ingratitude specified in Article 765 (speaks of  donee). Article 765 is applicable because like donation, commodatum is essentially gratuitous. The bailee who commits any of  the acts of ingratitude makes himself unworthy of  the trust reposed upon him by the bailor. Hence, the right given to the bailor to demand the immediate return of the thing. The following constitutes act of ingratitude:  If the baileee should commit some offenses against the person, the honor or the property of  the bailor, or his wife or children under his parental authority;  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 act  has been committed against the bailee himself, his wife or children under his authority; and  If the bailee unduly

b. When the depositor was not expected to know the dangerous character of the thing; c. When the depositor notified the depositary of  the same; d. The depositary was a aware of it without advice from the depositor

need not be the owner of  the thing leased in the case of a sublessee wherein the latter can sublet the thing to a third person. 

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Depositor retains the ownership of the thing loaned.

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Generally, the depositor must  be the owner of the thing deposited. But it may belong to another person other than the depositor.

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Failure of the lessor to fulfill any of these obligations will render him liable for damages He cannot alter the form of the thing leased in such a way as to impair the use to which the thing is devoted under the terms of the lease; Right to fix the rents; The lessor has not only the right to terminate the lease upon expiration of the term but also to increase the rent in case of renewal. Where the lessee fails to pay on time the stipulated rents, the lessor has the right to: rescind the contract, recover the unpaid rents and eject the lessee The lessor is not obliged to answer for a mere act  of trespass which a third person may cause on the use of the thing leased.

The lessor may  judicially  eject  the lessee for any of  the following causes: When the period  agreed upon, or that 

refuses the bailor support when the bailee is legally or morally bound to give support to the bailor.

On the part of the BAILEE: The borrower must return the same thing loaned.

On the part of the DEBTOR/OBLIGOR: The borrower need only pay the same amount of the same kind and quality.

Acquires the use of the thing loaned but not its fruits unless there is a stipulation to the contrary.

Ownership over the money, goods, or personal property passes to the borrower. Being the owner, the

On the part of the DEPOSITARY: 1. To keep the thing safely 2. To return the thing To whom? Depositor, his heirs, and successors, or the person who may have been designated in the contract. 3. Not to deposit the thing

which is fixed for the duration of lease under Articles 1682 and 1687, has expired; Lack of payment of   the price stipulated; Lack of payment of   the price stipulated; Violation of any of   the conditions agreed upon in the contract; When the lessee  devotes the thing leased to any use or service not  stipulated which causes the deterioration thereof; or if he does not observe the diligence of a good father of the family requirement  as regards the use thereof; The ejectment of  tenants of agricultural lands is governed by special laws. On the part of the LESSEE:  To pay the price of the lease according to the terms stipulated;  To use the thing leased as a diligent father of a family, devoting it to the use stipulated; and in the absence of stipulation, to that which may be

borrower can dispose of the The bailee can neither lend thing borrowed and his act  nor lease the object of the will not be considered contract to a third person. misappropriation thereof. 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. 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. However, claims for damages which the bailee suffered by reason of  hidden effects or flaws of  the thing loaned, which he was not warned or advised by the bailor. Moreover, his right is only to retain the thing until he is finally reimbursed. He has no right  to sell the thing to satisfy his claims.

4.

5.

6.

When there are two or more bailees to whom a thing is loaned in the same contract, they are all liable solidarily. In

an

ordinary

7.

with a third person unless authorized by express stipulation To change the way of the deposit if under the circumstances the depositary may reasonably presume that  the depositor would consent to the change if he knew of the facts of the situation, provided, the former notifies the depositor thereof and wait  for his decision, unless delay would cause danger If the thing deposited should earn interest: a. To collect interest and the capital itself as it  fall due; b. To take steps to preserve its value and rights with regard to it  Not to commingle things deposited if so stipulated Depositary can  only commingle if  the articles are of  the same kind and quality If commingling is  allowed, each depositor shall be entitled to each portion of the entire mass as the amount deposited by him bears to the whole. Not to make use of the

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inferred from the nature of the thing leased, according to the custom of the place; To pay the expenses for the deed of lease. The lessee is obliged to notify the lessor of the urgency of necessary repairs. He may ask for the rescission of the lease contract and indemnification for damages or only the latter, allowing the contract to remain in force. To notify the lessor of  every usurpation or untoward act by any third person and of the necessity or urgent  repairs. The lessee may suspend the payment of the rent  in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment  of the property leased. The lessee shall be liable for the damages which, through his negligence, may be suffered by the proprietor. If the lessor fails to make urgent repairs, the lessor, in order to avoid

commodatum, the possession of the bailee is more secure for he has the right to retain the thing loaned until the expiration of the period agreed upon, or the accomplishment of  the use for which the commodatum has been constituted.

thing deposited unless authorized Exceptions: a. When the deposit of  the thing requires its use, it must be used only for that purpose b. When authorized by the depositor. The authorization shall not  be presumed and its existence must be proved. 8. To be able for loss through fortuitous event  9. When the thing deposited is closed and sealed: a. To return the thing deposited in the same condition b. To pay for damages should the seal or lock  be broken through his fault, which is presumed unless proven otherwise c. To keep the secret of  the deposit when the seal or lock is broken with or without his fault. 10. To pay interest in sums converted to personal use if the deposit consists of  money from the day of  conversion Fixed, savings, and  current deposits of  money in banks and similar institutions shall

an imminent danger, may order the repairs at  the lessor’s cost. The lessee shall have a direct action against the intruder of the thing leased. In case of lease of rural lands, the outgoing lessee shall allow the incoming lessee or the lessor the use of the premises and other means necessary for the preparatory labor for the following year; and reciprocally, the incoming lessee or the lessor is under obligation to permit the outgoing lessee to do whatever may be necessary for the gathering or harvesting and utilization of  the fruits, all in accordance with the custom of the place. The privilege given  to the outgoing lessee to harvest the fruits evidently indicates that  existing crops at the termination of the lease belong to him.

be governed by the provisions concerning simple loan. 11. To advise the true owner that the deposit has been made should he discover that the thing deposited was stolen from the owner. If the owner  despite such information does not claim it within the period of 1 month, the depositary shall be relieved from all responsibility by returning the same to the depositor. *if the depositary has reasonable grounds to believe that the thing has not been lawfully acquired by the depositor, the former may return the same. 

Degree of Care required over the Thing:

The depositary may retain the thing in pledge until full payment of what may be due to him by reason of  the deposit.

Diligence of a Good Father Diligence of a Good Father Diligence of a Good Father of a of a Family on the part of  of a Family on the part of  Family on the part of the the bailee. the debtor. depositary unless a higher degree of diligence is stipulated by the parties.

Diligence of a Good Father of a Family on the part of  the lessee.

Liability

Purely personal in Not purely character, and character. consequently, the death of  either the bailor or the bailee extinguishes the contract. 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. (There is a tort/quasi-delict  for which the bailor is liable. Hence, the bailor is made liable for his bad faith. The bailee is given the right of retention until he is paid damages.) If both are aware of the flaws/defects, the bailee is deemed to have assumed the risk. The bailor cannot exempt  himself from the payment  of expenses or damages by abandoning the thing to the bailee.

personal

in

Personal in character. The liability of the depositary for the care and delivery of the thing is governed by the rules on obligations. a. He is liable if the loss occurs through his fault or negligence but  not when the loss is due to a fortuitous event; b. The loss of the thing while in his possession, ordinarily raises a presumption on his part; c. The required degree of  care is greater if the deposit is for compensation than when it is gratuitous. This is similar to the rule in agency and common carriers. But  even when it is gratuitous, due care must still be exercised. The keepers of hotels or inns shall be responsible as depositaries for the deposit of  the effects made by the travelers provided: a. Notice was given to them or to their employees of the effects brought by the guest; and b. The guests take the precautions which said

Not essentially personal in character, the rights and obligations therein are generally transmissible to the heirs of the lessor or the lessee

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hotel keepers or their substitutes advised relative for the care and vigilance of their effects. This also applies to the passenger’s baggage which is in his personal custody. Liability extends to vehicles, animals, and articles which have been introduced or placed in the annexes of the hotel

When the hotel-keeper LIABLE: when the loss or injury is caused: a. By his servant or employees as well as by strangers provided, that the notice has been given and proper precautions taken; and b. By the act of a thief or robber done without  the use of arms and irresistible force , for in this case, the hotel – keeper is apparently negligent. When hotel-keeper is NOT LIABLE: when the loss or injury is caused by: A. Force majeure, theft by a stranger with the use of arms or irresistible force; B. The acts of guests. His family, servants or

visitors; or C. Arises from the character of the things brought into the hotel Under Art. 2003, 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 guests. Any stipulation to such effect  shall be void. In case of loss or deterioration of the thing:

Generally, the bailee is not  liable for loss or damage due to a fortuitous event. However, the bailee is liable for the loss of the thing, even if it should be through a fortuitous event:  If he devotes the thing to any purpose different  from that for which it  has been loaned; (bad faith)  If he keeps it longer than the period stipulated or after the accomplishment of the use for which the commodatum has been constituted; (default, due to delay)  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; (law

The borrower suffers the loss even if caused exclusively by a fortuitous event and he is not, therefore, discharged from his duty to pay.

To be liable for loss through fortuitous event: A. If stipulated; B. If he uses the thing without the depositor’s permission; C. If he delays its return; D. If he allows others to use it, even though he himself may have been authorized to use the same; E. If there is fraud or negligence on his part. The depositary is liable for loss if he deposited the thing with a person who is manifestly careless or unfit. The depositary is responsible for the negligence for his employees. 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

The lessee is responsible for the deterioration or loss of the thing leased, unless he proves that it took place without his fault. This burden of proof on the lessee is does not apply when the destruction is due to earthquake, flood, storm or other natural calamity. The lessee is not liable for loss or depreciation due to: Lapse of time;  Ordinary wear and  tear; Inevitable cause or  fortuitous event. The lessee is liable for any deterioration caused by the members of his household and by guests and visitors. If the lessee continues enjoying the thing after the expiration of the contract, over the lessor’s objection,

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presumes that the borrower shall be liable for otherwise, they would not have appraised the thing) If he lends or leases the thing to a third person, who is not a member of  his household; (abused the trust) If being able to save either the thing borrowed or his own thing, he chose to save the latter. (ingratitude)

The loss of the subject  matter is suffered by the bailor since he is the owner. The bailee does not answer for the deterioration of the thing loaned due only to the use thereof and without his fault. Hence, the depreciation caused by the reasonable and natural use of the thing is borne by the bailor. However, if the deterioration is caused by the fault/negligence of the bailee, he is responsible for it. Improvements Thing:

on

the

The bailee is obliged to pay for the ordinary expenses for the use and preservation of the thing loaned. The bailor shall refund the

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. 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 be 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.

the former shall be subject  to the responsibilities of a possessor in bad faith and subjects himself to the liabilities of such possessor. In lease of urban lands, the lessor is obliged to make the necessary repairs on the property leased. The kind of  repairs he is required to make is that provided in the lease agreement, and in the absence of a special stipulation, the same must  be determined in accordance with the custom of the place. In case of  doubt as to who shall bear the cost of the repairs, it is understood that it is chargeable against the lessor.

If the lessee makes in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering The depositor is liable for loss the form or substance of the under the following instances: property leased, the lessor a. He transfers the deposit  upon the termination of the with a third person lease shall pay the lessee without authority, one-half of the value of the although there is no improvements at that time. negligence on his part and Should the lessor refuse to the third person; to reimburse said amount, b. He deposits the thing with the lessee may remove the a third person who is improvements, even though manifestly careless or the principal thing may unfit, although authorized, suffer damage thereby. He The owner-depositor bears the loss as long as the depositary is not at fault.

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 stipulation to the contrary. o Extraordinary expenses for the preservation of the thing loaned shall be borne by the bailor since it is he who is profited by the said expenses. As a rule, before the bailee incurs such expenses, notice notice is required because it is possible that the bailor may not want to incur the extraordinary expenses at all. He should be given discretion as to what  must be done with

c.

even in the absence of  negligence; or The thing is lost through the negligence of his employees whether the latter is manifestly careless or not.

shall not, however cause any more impairment upon the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. The lessee is entitled to the reduction of the rent if the following requisites are present: The land leased is  rural; More than one-half   of the fruits have been lost; The loss occurred  through extraordinary and unforeseen fortuitous event; and There is no specific  stipulation that the lessee is nevertheless not  entitled to reduction. The lessee is NOT entitled

o

If,

his property. An exception lies when they are so urgent. Extraordinary expenses arising from actual use of  the thing loanedsuch expenses (caused by fortuitous event) arising on the occasion of the actual use of the thing loaned shall be borne by the bailor and the bailee alike on a 50-50 basis on the basis of equitable solution wherein the bailee pays one-half  because of the benefit derived form the use of the thing loaned to him and the bailor pays for the other half  because he is the owner of the and the thing will be returned to him. The parties, however, may, by stipulation, provide for a different  apportionment of  such expenses, or that they shall be borne by the bailee or bailor only.

for

the

purpose

of 

to reduction of rent in rural lands in the following cases: On account of the  sterility of the land leased; By reason of the  loss of the fruits due to ordinary fortuitous events, regardless of the extent of the loss; By reason of the  loss of less than one-half of the fruits even though extraordinary and unforeseen events; By reason of the  loss of the fruits through extraordinary but  foreseen events regardless of the extent of the loss; By reason of the  loss of more than one-half of the fruits through extraordinary and unforeseen events, where there is a specific stipulation to the contrary; and Where the loss of   the fruits occurred after they have already been gathered, regardless of the extent of the loss.

making use of the thing, the bailee incurs expenses other than those referred to in Article 1941 (ordinary expenses) and Article 1949 extraordinary expenses), he is not entitled to reimbursement. Remedies in case of breach of contract/inability to perform the contract:

The bailee may seek the following remedies:  Rescission  Specific Performance  Damages

The creditor may seek the following remedies:  Rescission  Specific Performance  Damages

Depositary may be criminally The lessor may seek the liable for the crime of  estafa if  following remedies: he appropriates or diverts the  Unlawful Detainer thing deposited to his own use  Specific Performance without the consent of the  Damages depositor or civilly liable for  Rescission damages against the depositor.

Effect of the Transfer of  Ownership of the thing the Thing to the Recipient  loaned is retained by the lender.

The ownership over the thing is transferred to the borrower.

The ownership over the thing is not transferred to the depositary because the purpose of the contract is only for safekeeping.

Demand to Return the thing by the Owner

The lender may not demand its return before the lapse of the term agreed upon.

Period

Generally, The bailor cannot  just demand the return of  the thing at will because there is a period agreed upon which must be respected. However, the bailor may demand the return of the thing loaned before the expiration of the term in case of urgent need or in case of  precarium. Generally definite.

The owner or the lessor of  the property does not lose his ownership. He simply loses his control over the property rented during the period of the contract. Only the enjoyment or the use of  the thing is being transferred. Depositor can demand the The lessor cannot demand return of the subject matter at  the thing leased before the will. expiration of the contract.

Generally definite especially Generally definite, there being with regard to the payment  an obligation on the part of the of the interest. depositary to return the thing.

May be definite or indefinite but in no case can it exceed more than 99

years. May be CONVENTIONAL (fixed by the agreement of  the parties) or LEGAL (fixed by law in accordance with Article 1682 in case of rural leases and Article 1687 in case of urban leases). The lease of a piece of rural land, when its duration has not been fixed, is understood to have been made for all the time necessary for the gathering of the fruits which the whole estate leased may yield one year, or which it  may yield once, although two or more years may have to elapse for the purpose. In case of lease of urban lands, if the period for the lease has not been fixed: it is understood to  be from year to year, if the rent  agreed upon is annual; from month to  month, if the it is monthly; from week to week,  if the rent is weekly; and from day to  day, if the rent is to be paid daily.

However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.

Extinguishment Contract 

of

the

Upon the return of the identical thing loaned to the bailor when the time has expired or the purpose has been served.

The consumption of the A deposit is extinguished: thing loaned and the a. upon the loss or payment of the same destruction of the thing amount of the same kind deposited; and quality, with or without  b. in case of gratuitous interest (as to the interest, deposit, upon the death depending on the of either the depositor stipulation between the or the depositary. parties). A deposit for compensation is not extinguished by the death

When the lessor of a house, or part thereof, used as a dwelling for a family, or when the lessor of a store, or industrial establishment, also leases the furniture, the lease of the latter shall be deemed to be for the duration of the ease of the premises. If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished. If the destruction is partial, the lessee may choose between a proportional reduction of  the rent and a rescission of  the lease.

of either party because, unlike a gratuitous deposit, an onerous deposit is not  personal in nature. Upon the demand for the return of the identical thing deposited to the depositary even though a specified period or time for such return may have been fixed. Exception: a. when the thing is judicially attached while in the depositary’s possession. b. Should he have been notified of the opposition of a third person to the return or removal of the thing deposited in such instance, the depositary must  immediately inform the depositor of the of  the attachment or opposition

The lessee may terminate the lease at once by notice to the lessor in case the dwelling place or any other building is unfit for human habitation and is dangerous to life or health. The right is given to the lessee even if  the at the time the contract  was perfected, the lessee knew of the dangerous condition or waived the right to rescind the lease on account of said condition. At the expiration of the lease, the lessee must  return the property to the lessor in the same condition as he received it. If the lease was made for a determinate time, it ceases upon the day fixed, without  the need of a demand or notice to vacate and return the possession

The continuous possession of the leased premises after If the deposit is gratuitous, the the end or expiration of the depositary may return the time fixed in the contract, thing deposited with the acquiescence of  notwithstanding that a period the lessor constitutes an has been fixed for the deposit  implied renewal of the if justifiable reasons exists for lease, not for the period of  its return. If the depositor the original contract but for refuses to receive it, the the time established in depositary may secure its Articles 1682 and 1687, so consignation form the court. that if rentals were stipulated to be paid

If the deposit is for a valuable consideration, period must be followed even if the depositary suffers inconvenience as a consequence. What to return: A. product, accessories, and accessions of the thing deposited; B. if by force majeure or government order, the depositary loses the thing and receives the money or another thing in its place, he shall deliver the sum or other thing to the depositor Where to return: a. place agreed upon by the parties; or b. at the place where the thing deposited might  be even if it should not  be the same place where the deposit was made provided there was no malice on the part of depositary. Extinguishment of Voluntary Deposit: -the same as the causes for extinguishment of obligations in Art. 1231 of the New Civil Code a. novation b. compensation c. merger

monthly, the new lease is deemed to have been renewed form month to month and may be terminated each month upon demand. Instances when implied renewal is NOT applicable: Stipulation against  implied renewal; Invalidity of original lease; Acceptance of rentals beyond the original term; Acceptance of rentals less than amounts stipulated; Non-payment of rentals. Causes or Modes by which the agricultural leasehold relation may be extinguished: a. Abandonment of the landholding without  the knowledge of  the lessor; b. Voluntary surrender of the landholding by the lessee, written notice of which shall be served three months in advance; c. Absence of a successor or heir in the event of death or permanent  incapacity; d. Termination of the

d. remission e. payment  f. loss g. prescription h. fulfillment of the resolutory condition i. annulment  j. rescission

Statute of Frauds

May be governed by the Statute of Frauds

Not governed by the Statute of Frauds.

Usury Law

Not governed by the Usury Law

Governed by the Usury Law

leasehold by the lessee; e. Acquisition of the land in question by the lessee; f. Mutual consent of  the parties; g. Judicial ejectment of  the lessee. Not governed by the Statute of  Governed by the Statute of  Frauds. Frauds where the thing leased is real property for more than one year. Not governed by the Usury Not governed by the Usury Law Law