CIVIL LAW: CREDIT TRANSACTIONS > DEPOSIT > KINDS OF DEPOSIT

Under Philippine Civil Law, deposit is a type of contract regulated under Title XII, Chapter 1 of the Civil Code of the Philippines (Articles 1962–2009). In essence, a deposit is a contract wherein a person (the depositor) delivers a thing to another (the depositary) for safekeeping under the obligation of returning it upon demand. Deposits are classified based on their nature, purpose, and creation.

1. Kinds of Deposit

Deposits are broadly classified into voluntary deposit and necessary deposit, with further subdivisions under each.

A. Voluntary Deposit

A voluntary deposit is one wherein the delivery of the thing is made by the free will of the depositor. This type of deposit requires the consent of both parties.

Characteristics:
- Mutual Consent: Both the depositor and depositary agree to the safekeeping arrangement.
- Purpose: To secure the safekeeping of the deposited object.
Rules Governing Voluntary Deposits:
- Subject Matter: Can involve movable or immovable property, though traditionally, movable objects are more common.
- Obligations of the Depositary:
  - Must return the exact thing deposited upon demand, unless otherwise agreed (Article 1972).
  - Cannot use the thing deposited without express permission; otherwise, it constitutes commodatum or usufruct (Article 1977).
  - Responsible for the safekeeping and preservation of the item in the condition in which it was received.
- Termination: May be terminated at any time at the request of the depositor.
Examples:
- Depositing cash with a bank for safekeeping.
- Leaving personal items in the care of a friend.

B. Necessary Deposit

A necessary deposit arises from particular circumstances where the depositor is compelled to deliver a thing to another due to some urgent need.

Characteristics:
- No Voluntariness: Necessitated by circumstances such as calamity, misfortune, or legal obligations.
- Compulsion: The depositor has little to no choice but to entrust their property to the depositary.
Instances of Necessary Deposit:
- By Force of Circumstances:
  - In case of fire, flood, typhoon, or other calamities.
- By Law:
  - Example: A hotelkeeper is legally obligated to accept deposits from guests (Article 1998).
Special Rules:
- Hotelkeepers:
  - Obliged to accept deposits from guests unless dangerous items (Article 1998).
  - Liable for loss or damage unless caused by force majeure, the depositor’s negligence, or inherent defects of the item (Article 2000).
- Finder of Lost Goods:
  - Obliged to deposit the found item with the owner or with the authorities (Article 1996).
Obligations of the Depositary:
- Must use the same diligence as a good father of a family (ordinary diligence) in safeguarding the deposit (Article 1973).
- Liable for loss due to negligence or fault.

C. Judicial Deposit (Sequestration)

A judicial deposit arises when a court orders the safekeeping of property during litigation to ensure its preservation until a resolution is reached.

Purpose:
- To protect the subject matter of litigation.
- To preserve the rights of all parties involved.
Key Rules:
- Governed by procedural law and specific court orders.
- The custodian acts under strict court supervision.

D. Gratuitous vs. Compensated Deposit

Deposits can also be classified based on whether compensation is involved.

Gratuitous Deposit:
- The depositary does not receive any compensation for safekeeping.
- Standard of care required is that of a good father of a family (Article 1973).
Compensated Deposit:
- The depositary is paid for their service, in which case greater diligence is required in safekeeping the item (extraordinary diligence).

E. Deposit with Banks

A distinct form of deposit regulated separately due to its commercial nature.

Deposit of Money (Bank Deposits):
- Bank deposits are not governed by the rules of deposit under the Civil Code but by special laws and banking regulations.
- A bank deposit constitutes a simple loan, where ownership of the money passes to the bank, obligating the bank to return an equivalent amount upon demand (Article 1980).

F. Key Distinctions Between Kinds of Deposits

Aspect	Voluntary Deposit	Necessary Deposit
Creation	By mutual consent of depositor and depositary.	Compelled by circumstances or law.
Voluntariness	Voluntary.	Involuntary.
Cause	Safekeeping by free will.	Urgency or legal obligation.
Diligence Required	Ordinary diligence (good father of a family).	Ordinary diligence, except in compensated deposits where extraordinary diligence applies.

Summary of Obligations of the Depositary

Safekeeping: Preserve the object in its original condition.
Return: Deliver the same object upon demand or at the end of the agreed period.
Prohibition Against Use: Cannot use the object without permission.
Liability: Liable for loss or damage unless caused by force majeure or faults of the depositor.

By understanding these distinctions and rules, parties can properly navigate the legal nuances of deposit transactions under Philippine Civil Law.