III. DEPOSIT b. Definition of Deposit (“depositum” Roman law) ART. 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.
Characteristics of Deposit The contract of deposit is: (1)
It is a real contract like commodatum and mutuum because it is perfected by the delivery of the subject matter.
(2)
It is generally a unilateral contract. It gives rise to the principal obligation, on the part of the depositary, to safely keep the thing and to return it. It is only when the depositor has agreed to pay remuneration to the depositary that the contract will become bilateral and onerous, as the depositor assumes a primary obligation.
(3)
It is a nominate contract, because it has been given a specific name by the Civil Code.
(4)
It is a principal contract, because its existence is not dependent on another contract.
(5)
It is informal contract, because no particular form is required for the contract.
(6)
It is generally gratuitous contract (where the depositor does not pay compensation to the depositary) but it can be an onerous contract. Under Roman Law, a deposit is a gratuitous contract; if remuneration is paid by the depositor, the contract becomes a contract of work or service. Under the Civil Code, 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 .
Kinds of Contract of Loan Deposit is either: (1) judicial or one which takes place when an attachment or seizure of property in litigation is ordered (Arts. 2005-2008.); or (2) extrajudicial (Art. 1967.) which may be; (a) voluntary or 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.); or (b) necessary or 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. (Arts. 17341735.)
c. Nature A contract of deposit is generally gratuitous. (1) Where there is contrary stipulation. — The first exception is recognized in the general rule in contracts that the parties may establish any stipulation they may deem convenient provided it is not contrary to law, morals, good customs, public order, or public policy. (Art. 1306.) (2) Where depositary engaged in business of storing goods. — The second exception is based on the fact that the depositary is engaged in the business of storing goods (as in the case of a warehouseman) for compensation and not out of pure generosity. (3) Where property saved from destruction without knowledge of the owner. — In involuntary deposit, where property is saved from destruction during a calamity by another person without the knowledge of the owner, the latter is bound to pay the former just compensation. (see Arts. 1996[2], 1997, par. 2.)
Purpose (1) Effect where safekeeping only an accessory obligation. — The principal purpose of the contract of deposit is the safekeeping of the thing delivered so that if safekeeping is only an accessory or secondary obligation of the recipient of the thing, deposit is not constituted but some other contract like lease, commodatum, or agency. (Art. 1868.) Thus, the delivery of money to a person so that he may make payment or invest the money for the account of the giver, or of documents or records to a lawyer hired to represent a party to a suit, cannot be regarded as constituting a deposit, but only as an agency. Here, the principal end of the contract is representation of one by another and not the custody and preservation of the thing delivered. (2) Balance of commission account in agent’s possession at principal’s disposal appropriated by agent. — Where the balance of a commission account remains in the possession of the agent at the principal’s disposal, the same acquires at once the character of a deposit which the former must return or restore to the latter at any time it is demanded. The agent undoubtedly commits the crime of estafa if he appropriates or diverts it to his own use. It could only become his as a loan, if so expressly agreed by its owner who would then be obligated not to demand it until the expiration of the legal or stipulated period. (U.S. vs. Igpuara, 27 Phil. 619 [1913].) (3) Dollars deposited with bank sold by bank which credited peso proceeds to depositor’s current account. — Where the document which embodies the contract states that U.S. dollars in cash were received by the bank for safekeeping, and the subsequent acts of the parties also show that the intent was really for the bank to safely keep the dollars and return it to the plaintiff who demanded the return of the money about five months later, the above arrangement is the contract of deposit defined under Article 1962. The bank violates its obligation if it sells the dollars and it cannot defeat the plaintiff’s claim by asserting that the peso proceeds of the sale were properly credited to the latter’s current account. (Bank of the Phil. Islands vs. Intermediate Appellate Court, 164
SCRA 630 [1988].) The depositary cannot make use of the thing deposited except only in the two instances mentioned in Article 1977.
d. Distinctions between Deposit and Mutuum (Simple Loan) Deposit the principal purpose is safekeeping or mere custody the depositor can demand the return of the subject matter at will both movable and immovable property may be the object
Mutuum (Simple Loan) the consumption of the subject matter the lender must wait until the expiration of the period granted to the debtor only money and any other fungible thing
Distinctions between Deposit and Commodatum Deposit the principal purpose safekeeping may be gratuitous
Mutuum (Simple Loan) is the transfer of the use
essentially and always gratuitous In (extrajudicial) deposit, only both movable and immovable movable (corporeal) things property may be the object may be the object e. Definition of Voluntary Deposit distinguished from necessary deposit A voluntary deposit is one wherein the delivery is made by the will of the depositor. Ordinarily, there are only two persons involved. Sometimes, however, the depositary may be a third person. The chief difference between a voluntary deposit and a necessary deposit is that in the former, the depositor has complete freedom in choosing the depositary, whereas in the latter, there is lack of free choice in the depositor.
f. Obligations of the Depositary 1. To keep the thing safely and return it 2. Exercise same diligence as he would exercise over his own property 3. Not to deposit the thing with a 3rd person unless expressly authorized by stipulation Note: Depositary is liable for the loss if: a. He deposits the thing to a 3rd person without authority, even though the loss is due to fortuitous events b. Deposits the thing to a 3rd person who is manifestly careless or unfit although there is authority. 4. If the thing should earn interest:
a. collect interest as it falls due b. take steps to preserve the value and rights corresponding to it. 5. Not to commingle things if so stipulated 6. GR: Not to make use of the thing deposited XPNs: a. When preservation of thing deposited requires its use b. When authorized by depositor c. GR: In such case it is no longer a deposit but a contract of loan or commodatum, as the case may be. d. XPN: Principal reason for the contract is still safekeeping, it is still deposit. 7. When the thing deposited is delivered sealed and closed: a. return the thing in the same condition b. pay damages if seal be broken through his fault c. keep the secret of the deposit when seal is broken w/ or w/o his fault d. However, the depositary is authorized to open the seal or lock when: a. there is presumed authority b. out of necessity 8. GR: Pay for any loss or damage that may arise due to his fault XPN: Liability of loss through fortuitous event XPNs to XPN: Even in case of loss through fortuitous event, still liable if: a. Stipulated b. he Uses thing w/o depositor’s permission c. he Delays its return d. he Allows others to use it (even if he himself is authorized to use it) 9. Return the thing deposited with all its fruits, accessions, and accessories 10. Pay interest on sums converted to personal use if the deposit consists of money g. Obligations of the Depositor 1. Payment for necessary expenses for preservation a. If the deposit is gratuitous – reimburse depositary b. With compensation – no need for reimbursement; expenses borne by depositary 2. GR: Pay losses incurred by depositary due to the character of the thing deposited. XPNs: a. When at the time of deposit, the depositor was not aware of the dangerous character of the thing or was not expected to know it; b. When the depositor notified the depositary; or c. When the depositary was aware of it without advice from the depositor. 3. In case of an onerous deposit, to pay the compensation agreed upon as consideration for the deposit.
