Title XII (Deposit) Flashcards
🟢CHAPTER 1 - DEPOSITS IN GENERAL & ITS DIFFERENT KINDS🟢
what is a Deposit
Deposit is a contract where the depositor delivers a thing to the depositary for the principal purpose of safekeeping it with the obligation of returning it when demanded, [and] not to allow this other person to use the thing.
- However, if he should use, it is only incidental to the primary use which is preservation
similarities with deposit & loan
real contract perfect by delivery of the thing to the depositary by the depositor
similarities with deposit & mutuum
either onerous or gratuitous,
but if CoD (contract of deposit) is silent about consideration, PRESUMPTION is that it is gratuitous
parties to CoD
Depositor - one who deposits
Depositary - obliged to safe keep
knowledge check: what is a real contract?
obligation arises only upon the delivery of the subject matter by one party to the other
Characteristics of a CoD
- It is a real contract perfected by delivery (1963)
- Naturally gratuitous, [unless]:
- the contrary is stipulated
- Depositary is engaged in the business of storing goods - The purpose is primarily custody
- where the custody is
secondary, it is NOT deposit. - The contract is unilateral or bilateral, according to whether
it is gratuitous or compensated. - Depositary cannot use the thing deposited, [except]:
- Express permission of the depositor
- Preservation of the thing requires its use but only for
said purpose
- Only movables can be the object of a contractual deposit;
- Only applies to extrajudicial deposits.
But if money is delivered to you in a deposit, and the depositor demands the return of the money after a certain period and depositary ask an extension to return the money,
- was the initial contract a deposit alone?
- was a deposit converted into a contract of loan?
- was it initially a contract of loan?
In the case of Javellana vs Lim, the court said, from the start it was a loan. Why would you extend the period if you did not allow the depositary to use the money in the first place?
Because if it is a deposit, you could have demanded for the return of the money anytime. And there will be no occasion to ask for an extension for the return.
Can an Intangible be an object in a CoD?
No, there has to be actual delivery of the object that is why only movables can be the object of voluntary deposit
Can documents evidencing ownership of an intangible thing be the object of deposit?
like a share of stock, it is intangible but what is tangible is its evidence of ownership which is the stock certificate
Yes, a stock certificate or documents evidencing ownership of an intangible can be the object of CoD
What is the nature of a deposit?
A deposit is generally gratuitous except
- express provision that compensation be paid
- engage in the business of storing goods
When is deposit considered as a loan?
If there is stipulation as to payment of interest, because interest can ONLY arise from a Contract of Loan
knowledge check: what is a consensual agreement
consensual agreement, naay obligation mo arise which is to deliver the money/thing (not necessarily one year, can be any period stipulated as long as less than one year). if lapas one year, need na in writing to make it enforceable kay ma fall na sa statute of frauds.
after delivery, diha na ang commodatum/mutuum mo arise. hence, katong rules sa commodatum/mutuum mo apply like dapat i preserve ni bailee with diligence of a goof father and other obligations peculiar to a commodatum or mutuum.
2025: Judge A promises to lend you 100k to support your review for the bar exam i
2027: You took the BAR exam and demanded 100k from Judge A and she refused
Can you compel Judge A?
What can Judge A do to ensure she is not compelled to give 100k?
[A]
No, the performance of obligation and one year has already passed (Statute of Frauds).
[B]
While the obligation is valid and binding, judge A can invoke the unenforceability of the contract
- Has to be in writing to be enforceable.
if the agreement is to merely to constitute a deposit (consensual contract), is this valid?
Yes, it is valid but the obligation only arises upon actual delivery
In most instances, the structure where he stores his goods is called a warehouse. That’s why the depositary is called a warehouseman, and because you deposit your goods to the warehouseman for storage, the warehouse man issues a receipt, the contract is called?
It is still a CoD, but is governed by Warehouse Receipt Law
what is the rulings laid down in the case of
US v. Igpuara (1913) on the “Effect of balance of commission retained by agent”
- depositary requires depositor’s consent to use the thing deposited and the rights & obligations as depositary & depositor ceases and rules on loan or contract shall be observed
- failure to claim at once or delay for some time in demanding restitution of the thing deposited does NOT imply permission to use the thing deposited
What is the transaction between a bank and a depositor
BPI v. IAC (1988)
it is that of creditor & debtor because the contract between them is a loan
why is the classification of the contract as LOAN (mutuum) significant between a bank and a depositor?
upon deposit, ownership transfers to the debtor bank thus the bank can lend it to others
If I deliver to you as a bank $3k for safekeeping and you converted that US dollar to Philippine Peso, could I successfully prosecute you for misappropriation or estafa?
No, as in the case of BPI v. IAC because of CB Circular No. 20 which require the foreign currency to be converted in Philippine peso
Yes, if there were no circular because I have the obligation to return the same amount of THE SAME KIND of what was delivered
Petitioner entered into an agreement with Spouses Pugao for the sale of land. The certificates of title were placed in a safety deposit box at Security Bank, with the bank holding the guard key and the petitioner and Spouses Pugao each holding their own keys. When a third party, Ramos, sought to inspect the certificates, they were found missing. Ramos withdrew her offer to purchase, and the petitioner sued the bank for the loss of the certificates. The bank argued that the contract was a lease, limiting its liability. The petitioner contended it was a contract of deposit.
Issue: Whether the agreement between the petitioner and the bank is a lease or a deposit
LB: CA Agro-Industrial Corp v. CA
SC held that the contract was a special deposit, not a lease, and that the bank could be held liable for the loss of the certificates due to negligence or fraud.
It is a special deposit because of shared control.
[gpt]
In a normal deposit, the depositor typically has full access and control over the thing deposited. In this case, while the petitioner and the Pugaos held keys to the safety deposit box, the bank retained the guard key, which meant that the bank had to be involved in opening the box. This aspect of shared control made the deposit different from a traditional deposit, where the depositor would have sole control.
However, the case was dismissed because the petitioner failed to prove the bank’s negligence or fraud.
in the case of CA Agro-Industrial Corp v. CA, what would it take or look like should it be a contract of lease?
for the bank to have absolute and full control to the effect that the bank can open the deposit box at anytime with the renter’s and guard’s key
In the case of CA Agro-Inudstrial Corp v. CA
Is the bank liable for the loss of the certificates of title even when there is a disclaimer that the bank is NOT liable for any loss?
[SC]
Accordingly, the depositary would be liable if, in performing its obligation, it is found guilty of fraud, negligence, delay or contravention of the tenor of the agreement…
Hence, any stipulation exempting the depositary from any liability arising from the loss of the thing deposited on account of fraud, negligence or delay would be VOID for being contrary to law and public policy.
In the case of CA Agro-Industrial Corp. v. CA
was there negligence on part of the bank when the petitioner and spouses Pugao agreed between themselves that in order for them to open the safety deposit, both depositors’ signatures are required?
No, the Bank was not negligent because in the case, the depositors did not communicate to the bank the agreement that there must be both signatures of the depositors
Suppose in the case of CA Agro-Industrial Corp v. CA Security Bank was negligent, what LB do you have for damages?
Art. 1170
“Those who in the performance of their obligations are guilty of [fnd] fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.
Sia rented a safety deposit box at Security Bank and Trust Company (SBTC), where he stored his stamp collection. During a flood, water seeped into the bank’s premises and damaged Sia’s collection. SBTC rejected Sia’s claim for compensation, citing its “Rules and Regulations Governing the Lease of Safe Deposit Boxes, par. 9 & 13” which limit the bank’s liability and state that SBTC is not responsible for the contents of the box. SBTC also argued that the contract was a lease, not a deposit, and that the flood was an event beyond its control.
Issue: Is SBTC liable for the damage to Sia’s stamp collection despite the provisions in its governing rules that limit liability?
Sia vs. CA (1993)
[SC]
- both conditions No. 9 and No. 13 of the “Lease Agreement” covering the safety deposit box in question must be stricken down for being contrary to law and public policy as they are meant to exempt SBTC from any liability for damage, loss or destruction of the contents of the safety deposit box which may arise from its own or its agents’ fraud, negligence or delay
Lim and his co-debtors obtained a sum of P2,600 from Javellana. The document described the transaction as a “deposit without interest.” When the obligation became due, Lim requested an extension of one year to repay the loan and agreed to pay interest at 15% per annum. Javellana granted the extension, and Lim acknowledged using the money.
Issue: Was the transaction between Javellana and Lim a loan or a deposit?
Javellana vs. Lim (1908)
It is a loan evidenced by the grant of extension confirming that the purpose of the 2600 was for Lim et al., to use the money.
Thus, it is a CoLoan in spite of the contract providing for the word “deposit”
knowledge check: what is novation and was there novation in the case of Javellana v. Lim
Novation refers to substitution of a contract to a new one.
In this case, there was no novation from CoD to CoL as it was a CoLoan from the beginning.
Kinds of Deposit
- Judicial Deposit
- Extrajudicial (voluntary/necessary)
- Regular
- Irregular
[imo]
- special deposit (CA Agro-Development Corp v. CA)
what is a judicial deposit?
takes place when an attachment [or] seizure of the property in litigation is ordered by the court.
what are extrajudical deposit
voluntary deposit - made by the will of the depositor with the consent of the depositary.
necessary d - made in compliance with a legal obligation; on the occasion of a calamity; travelers in inns, hotels, common carriers.
distinguish regular and irregular deposits
reg - -ary not allowed to use
irreg - -ary allowed to use movable deposited
Is a contract to make a future deposit binding?
Yes. An offer to make a contract for future deposit is merely consensual, but nevertheless, binding if the offer is accepted.
How is deposit distinguished from sale or barter?
insofar as:
- ownership
- nature
- perfection
[Deposit]
- ownership NOT transferred to depositary
- may be gratuitous
- real contract; requires delivery
[Sale]
- ownership transferred
- onerous
- consensual;
sale refers to one party that obligates himself to transfer ownership [and] deliver a determinate thing [and] the other to pay a certain price
[Barter]
- ownership transferred
- onerous
- consensual
Deposit v. Commodatum v.Mutuum
as to;
- purpose
- nature
- thing involved
- when to demand
[Deposit]
- safekeeping
- may be gratuitous/onerous
- movable only (extrajudicial D)
- Depositor can demand at will
[Commodatum]
- use thing loaned
- essentially gratuitous
- movable [or] immovable
- Bailor must wait until period stipulated lapse [unless] precarium
[Mutuum]
- consumption of object
- may be gruitous/onerous
- money [or] fungible thing
- Lender must wait until period to lapse
Deposit v. Simple Loan (Mutuum)
- similarities
- differences
[Sim]
- actual delivery
- real contracts
[Diff]
- purpose (safekeeping v. consumption
🟢CHAPTER 2 - VOLUNTARY DEPOSIT🟢
what is a voluntary deposit
A contract where a thing is delivered at the will of a depositor to the depositary for the purpose of safekeeping by the latter coupled with the obligation of returning it upon demand.
Is ownership required in deposit?
No, since ownership of the thing deposited is not transferred to the depositary
Kinds of voluntary deposit
- Complete freedom - Where deposit is by will of the depositor
- Conflicting adversarial claims - Where the deposit is by two claimants, and the thing is to be delivered to the one found to be entitled to it. The ownership is litigated here. Litigate between themselves, and we call this litigation as “Interpleader”.
Requisites of a Voluntary Deposit
- Capacity of the Parties
- Object
- Consideration
- Form
knowledge check: civilly, what does Incapacitated mean
[gpt]
incapacitated persons refer to those who are legally disqualified from entering into certain contracts or performing specific legal acts due to their age, mental condition, or other legal impediments.
Requisites of a Voluntary Deposit > 1
Depositor (capacitated)
Depositary (Incapacitated)
-Ary disposes the movable
What is -Or’s remedies?
Art. 1971, his only remedy is;
- an action to recover thing deposited while in possession of -Ary, or
- action to compel to pay him the price or amount of enrichment
“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. “
what if the -Ary incapable disposed the thing to a 3rd person? can the 3rd person be compelled to return the thing?
Art. (1971)
“…However, if a third person who acquired the thing acted in bad faith, the depositor may bring an action against him for its recovery. “
If good faith, -Or’s remedy is only against the -Ary for the return of the price/amount he was benefitted
What if the third person acted in good faith, but the depositary acted in bad faith? Can you impute bad faith on an incapacitated person and recover damages?
No, precisely because the depositary is legally incapacitated thus you cannot recover damages from him.
It’s a presumption that he can’t distinguish between right and wrong.
Requisites of a Voluntary Deposit > 1
Depositor (incapable)
Depositary (capable)
what is the remedy of the incapable depositor?
-Ary may be compelled to return the thing by the guardian (administrator) [or] by the -Or himself if he should acquire capacity (1970 & 1986)
Requisites of a Voluntary Deposit > 1
Which is false
Capacity is required in claiming the return
Capacity is required in making the deposit
Capacity is NOT required when making a deposit BUT is required when claiming the return
Requisites of a Voluntary Deposit > 2
when is an immovable property be the object of a deposit?
in judicial deposit
knowledge check: what is the nature of the contract when one of the parties is incapable?
it is voidABLE. meaning valid until annulled
A and B entered into a CoD where A knows that B is incapable.
Can A later allege the incapacity of B?
No, as provided Art. 1397
“Article 1397. The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. However, persons who are capable cannot allege the incapacity of those with whom they contracted; nor can those who exerted intimidation, violence, or undue influence, or employed fraud, or caused mistake base their action upon these flaws of the contract.”
knowledge check: does payment to an incapacitated by an incapacitated person extinguish an obligation?
No, it only extinguishes the obligation only to the extent he was benefited
A minor, John, deposits a valuable painting with David, an adult depositary.
Later, John demands the return of the painting. David, without verifying John’s capacity, hands over the painting
Can the parents of John hold David liable for the lost painting?
[gpt]
Yes, David’s obligation was to safekeep the painting is not extinguished because John, being incapacitated, could not fully benefit from receiving it back.
What are the obligations of the Depositary
-
Preserve the thing
- ordinary diligence unless a higher degree is stipulated - Return the thing
Is the depositary liable for loss due to fortuitous event?
GR: No, no person shall be liable for those events which could not be foreseen, [or] although foreseen were inevitable
XPN
1. if so stipulated
2. uses the thing without permission of -Or’s
3. delays its return
4. allows others to use even if he himself may have been authorized to use the same
[imo]
5. Negligence of the ‘Ary
Obligation of Depositary > Preserve the thing
Can the depositary use the thing deposited?
GR: No, deposit is for safekeeping and not for use
XPN
1. -Or’ expressly allows. The CoD ceases and becomes Contract of Loan or Commodatum
- If preservation requires its use, but only for such purpose.
What is the effect of unauthorized use?
-Ary liable for damages (art. 1170)
What are the effects of authorized use?
[Non-consumable Thing]
- ceases to be CoD and becomes CoCommodatum
xpn: safekeeping is still principal purpose of contract
[Consumable thing/Money]
- ceases to be CoD and becomes CoL
xpn: if safekeeping still principal purpose of contract but now becomes IRREGULAR DEPOSIT
Deposit to a 3rd Person
Is the depositary allowed to the deposit the thing with a third person?
GR: No
XPN: express stipulation
XPN-XPN: -Ary deposits the thing to a person manifestly careless & unfit
In what instances may the depositary be held liable?
-Ary is liable for loss [or] damage of the thing
deposited when:
- he transfers the deposit to a 3rd person w/o authority
- deposits thing to 3rd person manifestly unfit & careless even though authorized
- lost through the negligence of -Ary’s employees
What is the effect if the depositary delegates safekeeping
He can be liable for damages for whatever reason (even fortuitous events) for loss of the thing.
When can he be exempt from liability if he delegates?
GR: -Ary liable
XPN: delegated it to someone NOT manifestly unfit & careless
if delegated to someone manifestly unfit, -Ary is liable
Change In The Manner Of Deposit
May the depositary change the manner of deposit?
GR: No, place of delivery & other conditions cannot be modified as gen rule
XPN: When the -Ary may reasonably PRESUME that the -Or knew of the facts of the situation.
Requisites:
- -ary notifies -Or of such change
- -Ary must wait for reply of -Or to the change [unless] delay would cause danger
What if there is an imperative to change the manner and to transfer from one warehouse to another because of typhoon Yolanda?
Can the -Ary change the manner of deposit?
GR: No
XPN: -Ary reasonably presume -Or would agree to the modification
so -ary can do so without permission
There is a storm, and the warehouse where the deposited goods are located is along the coastal area of the locality and there’s a threat of a storm surge and so the depositary wanted to transfer the goods from that particular warehouse to the higher area of the same locality. He tried to contact the depositor to no avail.
Since there’s an urgency to transfer the goods, he did not wait for the consent of the depositor and transferred the goods to the safer warehouse
Unfortunately, that “safer” warehouse was also destroyed.
Can the depositor hold the depositary liable for damages for changing the manner or way of the deposit?
GR: -Ary should not change the manner of deposit. If so, shall be liable
XPN: When -Ary can reasonably presume that the -Or would agree to the modification if -Or knew the facts of the situation by
- -ary notifies -or of such change
- -ary waits for reply** from -or before the change.
In that instant, the -Ary is NOT liable even
Preservation of Value
What is the rule if the thing deposited should earn interest
-Ary is obliged to:
- collect interest
- preserve its value & rights corresponding to it
note
-Ary bound to collect the capital [and] interest when due
What if the security deposited by the depositor matures DURING the period of the deposit?
The depositARY must collect the proceeds from the securities. Otherwise, it might go stale.
[gpt]
If the depositary fails to collect the proceeds on time, the depositor could lose their right to claim the value of the matured security. This is because some financial instruments have expiration periods for claiming their value, and unclaimed amounts may “go stale.”
You pawn your camera for a loan of 5000php with 3% interest/month and received a pawn ticket
you delivered this ticket to the depositary.
what’s the obligation of the depositARY?
what is the obligation of the depositOR?
[-Ary]
- preserve the value of the thing
- notify when pawn matures or interest accrues (unless) it is a deposit box in a bank, then it is - Or’s obligation to know material dates
- keep secrecy of deposit [unless] it is a crime
[-Or]
- renew the pawn by paying interest
liability of -Ary for keeping secret the object of deposits which are contrabands/drugs
-Ary liable as an accessorry to the crime for maintaining secrecy in an exceptional circumstance
Secrecy of Deposit
What are the depositary’s obligations as regards closed and sealed deposits?
- Return the thing in the same condition deposited when delivered closed and sealed
- Exception: If safekeeping is still the principal purpose of the contract.
- If the thing deposited is money or other consumable thing, the contract is CONVERTED into a simple loan or mutuum. (CoL)
- Exception: If safekeeping is still the principal purpose of the contract, but it now becomes an irregular deposit.
- Pay for damages should the seal or lock be broken through his fault which is presumed [unless] proven otherwise.
- Keep the secret of the deposit when the seal or lock is broken with or without his fault.
[XPN]
- meaning -Ary can break/open the deposit as long as the primary purpose is its safekeeping
If the object deposited is placed in a locked receptacle or any locked, sealed inside the box, accidentally opened without the fault of the depositary? What is the obligation of the depositary?
Maintain the secrecy of the deposit, unless, if keeping the secret would make him an accessory to the crime like what is sealed in the receptacle is a kilo of shabu, where he is no longer obliged to keep it as a secret.
page 21
On the xpn that deposit is gratuitous, a depositary who is engaged in the business of storing goods issues
warehouse receipt
Safety deposit boxes are exclusive to banks
T/F
False. Hotels can also have SDB
If -Ary is incapable, sold the movable thing to a 3rd person and is yet to receive the amount, what is the remedy of the -Or?
Subgratory action to the third person
What is delivered for deposit to you are sums of money with their particular serial number, it so happened that you used it but when the time to demand was made, you gave the same amount but of different serial number.
Is this allowed?
Yes, commingling is allowed.
Can the judgment obligee (Creditor) attach the deposit or the movable thing of the -Or(debtor)?
Yes
knowledge check: (oblicon) if no stipulation where return is made, return will be made where?
At the time of demand without fault on the part of the -Ary (?)
Can -ary seek reimbursement from -Or for extraordinary expenses
Law does not distinguish between ordinary and extraodrinary. Only ordinary and ornamental
-Or deposits 100k to -Ary but is at the same time obliged to hand 100k.
-Or now demands the 100k from safekeeping from -Ary
Does -Ary have a right to ask for a set-off or call it quits?
No compensation arising from commodatum or depositum
however if they agree then no problem
but as a matter of right, -Ary cannot compel
