Deposit

Extrajudicial | Kinds of Deposit | Deposit | CREDIT TRANSACTIONS

CIVIL LAW > VIII. CREDIT TRANSACTIONS > B. Deposit > 2. Kinds of Deposit > b. Extrajudicial Deposit

Definition and General Principles

An extrajudicial deposit is a contract whereby a person (the depositor) delivers a thing to another (the depositary) with the obligation of the latter to keep it and return it when demanded by the depositor. It is one of the two kinds of deposit under Philippine law, distinguished from a judicial deposit which arises in litigation or under compulsion of law.

Extrajudicial deposits are governed by Articles 1966 to 1995 of the Civil Code of the Philippines.

Characteristics

  1. Real Contract: The deposit is perfected upon the delivery of the thing to the depositary.
  2. Principal Contract: It exists independently and is not accessory to any other obligation.
  3. Unilateral or Bilateral:
    • Unilateral: When the obligation to return the thing rests solely on the depositary.
    • Bilateral: When both parties have reciprocal obligations, such as in a remunerated deposit.

Essential Elements

  1. Subject Matter: Movable or immovable property.
    • Primarily pertains to movable objects unless otherwise specified.
  2. Purpose: Safekeeping or custody of the property.
  3. Delivery: Actual or constructive delivery of the thing to the depositary.

Kinds of Extrajudicial Deposits

  1. Voluntary Deposit:

    • Made by the depositor’s own free will.
    • Governed by Articles 1966 to 1980 of the Civil Code.
    • Requisites:
      1. Capacity of the depositor: The depositor must have legal capacity to contract.
      2. Acceptance by the depositary: The depositary must consent to the deposit.

  2. Necessary Deposit:

    • Made due to some urgent or unavoidable circumstance.
    • Governed by Articles 1996 to 2004 of the Civil Code.
    • Examples:
      • Deposit during a fire, storm, or similar emergencies.
      • Deposit by travelers in inns, hotels, or lodging houses.
    • Requisites:
      1. The deposit arises from an urgent need.
      2. The depositary may not refuse acceptance if such refusal would cause damage to the depositor.
    • Innkeepers’ Liability:
      • Includes responsibility for the personal effects of guests.
      • Liability is presumed unless: a. Loss is due to force majeure. b. The depositor acted with negligence. c. The loss occurred due to the nature of the thing.

Obligations of the Depositary

  1. Principal Obligations:

    • Safekeeping: Exercise diligence in the care of the thing deposited (ordinary diligence unless otherwise agreed).
    • Return: Deliver the thing when demanded, even if a period has been stipulated unless the depositary has a right to retain it (e.g., for unpaid expenses).

  2. Accessory Obligations:

    • Non-use: The depositary must not use the thing without the depositor’s consent.
    • Return of accessories or increments: The depositary must return all fruits or accessories of the deposit unless otherwise agreed.

  3. Liabilities:

    • The depositary is liable for loss or deterioration unless:
      • It is due to a fortuitous event.
      • The depositor failed to disclose the dangerous character of the thing deposited.

Rights of the Depositary

  1. Retention: The depositary may retain the deposit until full payment of expenses incurred in preserving it.
  2. Reimbursement: The depositary has the right to reimbursement for necessary expenses.

Termination of the Deposit

  1. Demand for Return: The depositor may demand the return of the thing at any time unless a period has been fixed and the depositary has not committed a breach.
  2. Loss or Destruction: The contract is extinguished if the thing is lost or destroyed without fault of the depositary.
  3. Death: If the depositary dies, his heirs are bound to return the thing unless the contract stipulates otherwise.

Special Rules on Necessary Deposits

  1. Deposits with Innkeepers:

    • Guests are presumed to deposit their belongings with the innkeeper.
    • Innkeepers are liable for loss unless the loss arises from: a. Force majeure. b. Fault of the guest. c. Nature of the thing deposited.

  2. Deposits by Travelers:

    • Travelers may deposit valuables in the innkeeper’s safe or equivalent facility.
    • Failure to use such facilities may relieve the innkeeper of liability.

Special Cases

  1. Commodatum vs. Deposit:

    • Commodatum involves the loan for use; deposit entails safekeeping.
    • In deposit, ownership remains with the depositor.

  2. Bank Deposits:

    • Bank deposits are considered irregular deposits (Article 1980).
    • Ownership of the money passes to the bank, which is obligated to return the same amount.

  3. Irregular Deposits:

    • Occurs when the thing deposited is consumable (e.g., money).
    • The depositary becomes the owner but is obliged to return an equivalent amount or quality.

Relevant Jurisprudence

  1. Liability of Depositaries:
    • The depositary’s liability extends to ensuring due diligence is observed in safekeeping, as ruled in relevant Supreme Court decisions.
  2. Innkeeper Deposits:
    • Jurisprudence has clarified the extent of innkeepers' liability for losses within their premises.

This overview provides a meticulous explanation of extrajudicial deposits under Philippine Civil Law, focusing on their kinds, elements, obligations, and related nuances.

Judicial | Kinds of Deposit | Deposit | CREDIT TRANSACTIONS

CIVIL LAW > CREDIT TRANSACTIONS > DEPOSIT > JUDICIAL DEPOSIT

Definition of Judicial Deposit

A judicial deposit, also known as a sequestration, is a form of deposit that occurs when an object or property in litigation is placed in the custody of a third party (depositor or custodian) to ensure its preservation and eventual disposition according to a judicial decision. It is a specific form of deposit regulated by law to safeguard disputed property during the pendency of litigation.

Legal Basis

Judicial deposit is governed under the Civil Code of the Philippines, primarily in Articles 2005 to 2007 and in conjunction with the provisions on deposit in Articles 1962 to 2004.

Characteristics of Judicial Deposit

  1. Judicial in Nature
    Judicial deposits arise by virtue of a court order or through legal proceedings. They are not based on the voluntary agreement of the parties but are imposed by law to protect the interests of the litigants.

  2. Involves Disputed Property
    The property or object involved in a judicial deposit is typically the subject of litigation, and its custody is temporarily entrusted to ensure impartial handling and preservation.

  3. Depositary Appointed by Court
    The court designates the person or entity to act as the depositary or custodian of the property.

  4. Temporary Custody
    The purpose of judicial deposit is temporary, lasting only until the court renders a final judgment on the matter.

Requirements for Judicial Deposit

  1. Existence of a Legal Dispute
    Judicial deposit occurs only when there is a pending litigation concerning the ownership, possession, or custody of the property.

  2. Court Order
    The judicial deposit must be expressly ordered by the court. It cannot be established voluntarily between the parties in the absence of litigation.

  3. Appointed Depositary
    The court appoints a neutral third party, such as a public official, a bonded warehouse, or any person capable of preserving the property in dispute.

Obligations of the Depositary in Judicial Deposit

The depositary in a judicial deposit assumes the responsibilities outlined under the Civil Code for voluntary deposits, including:

  1. Safekeeping the Property
    The depositary must preserve the property and prevent its loss, destruction, or deterioration.

  2. Return of Property Upon Demand
    The property must be returned or delivered in accordance with the final court order or the law.

  3. Liability for Negligence or Fraud
    The depositary is responsible for any damage caused to the property due to negligence or fraud.

  4. No Right to Use the Property
    The depositary cannot use the property unless expressly authorized by the court or the nature of the deposit allows it.

Kinds of Judicial Deposit

Judicial deposit may take the form of:

  1. Movable Property
    Where the object deposited is tangible personal property, such as goods or documents in dispute.

  2. Immovable Property
    Where the subject of the deposit is real property, such as land or buildings. The court may appoint an administrator to manage the immovable property during the litigation.

Legal Effects of Judicial Deposit

  1. Preservation of Property
    Judicial deposit ensures the property remains intact and unaffected by any unilateral actions of the parties involved in the litigation.

  2. Neutral Custody
    The court-appointed depositary acts as a neutral party to hold and manage the property until the resolution of the case.

  3. Enforcement of Court Decisions
    Once a judgment is rendered, the depositary must comply with the court’s orders concerning the disposition of the property.

Judicial Deposit Distinguished from Other Deposits

Aspect Judicial Deposit Voluntary Deposit
Nature Mandated by court order Based on agreement between parties
Cause Legal dispute over property Voluntary safekeeping
Appointing Authority Court Mutual agreement
Depositary Rights Governed strictly by court directives Subject to terms agreed upon

Relevant Case Law

Philippine jurisprudence has reinforced the principles surrounding judicial deposits:

  1. Neutral Custody Requirement: Courts emphasize that the primary purpose of judicial deposit is to maintain the neutrality and preservation of the disputed property.
  2. Depositary Liability: The courts have consistently held depositaries liable for damages resulting from their negligence or failure to adhere to court orders.
  3. Court Jurisdiction: Only the court handling the case has the authority to order a judicial deposit.

Key Provisions of the Civil Code

  1. Article 2005: Defines sequestration and its relation to judicial deposit.
  2. Article 2006: Enumerates the obligations of a sequestrator.
  3. Article 2007: Stipulates the procedure for turning over the property to the appropriate party after judgment.

By understanding these elements, practitioners can navigate issues involving judicial deposits with precision, ensuring compliance with legal standards and the effective resolution of disputes.

Kinds of Deposit | Deposit | CREDIT TRANSACTIONS

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.

  1. Characteristics:

    • Mutual Consent: Both the depositor and depositary agree to the safekeeping arrangement.
    • Purpose: To secure the safekeeping of the deposited object.

  2. 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.

  3. 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.

  1. 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.

  2. 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).

  3. 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).

  4. 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.

  1. Purpose:

    • To protect the subject matter of litigation.
    • To preserve the rights of all parties involved.

  2. 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.

  1. 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).

  2. 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.

  1. 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

  1. Safekeeping: Preserve the object in its original condition.
  2. Return: Deliver the same object upon demand or at the end of the agreed period.
  3. Prohibition Against Use: Cannot use the object without permission.
  4. 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.

Definition | Deposit | CREDIT TRANSACTIONS

CIVIL LAW > VIII. CREDIT TRANSACTIONS > B. Deposit > 1. Definition

I. Legal Definition

Under Philippine law, specifically Articles 1962 to 2009 of the Civil Code of the Philippines, deposit is a contract whereby a person (the depositor) delivers a thing to another (the depositary) for safekeeping, under the obligation of the latter to return the thing upon demand or at the expiration of the agreed term.

II. Types of Deposit

The law recognizes two types of deposits:

  1. Judicial Deposit (Sequestration) - Deposit made in compliance with a court order or judicial proceeding.

    • Governed by Articles 2005-2009 of the Civil Code.
    • Example: Deposit of disputed goods during litigation.

  2. Extrajudicial Deposit

    • Voluntary Deposit (Article 1968): Constituted by the will of the parties; the depositor freely delivers the thing to the depositary.
    • Necessary Deposit (Article 1996): Arises due to unforeseen events, such as calamities or urgent situations, where a person is compelled to deposit something in order to save it from harm.

III. Characteristics of Deposit

  1. Principal Purpose: Safekeeping of the thing.
  2. Nature of the Contract: Essentially a real contract perfected upon delivery of the thing, unless it is an irregular deposit (e.g., involving money), where it becomes a consensual contract.
  3. Fiduciary Relationship: Based on trust and confidence between the depositor and the depositary.

IV. Essential Requisites

  1. Delivery of the Thing:

    • The depositor must place the thing in the possession of the depositary.
    • Can be actual or constructive.

  2. Purpose of Safekeeping:

    • The thing is delivered for the primary purpose of being safeguarded and returned.

  3. Return of the Thing:

    • The depositary is obligated to return the same thing delivered, except in specific instances involving irregular deposits (e.g., money that is commingled and considered fungible).

V. Duties and Obligations

  1. Obligations of the Depositary:

    • To safely keep the thing and exercise diligence as required by the nature of the thing (Article 1972).
    • To return the thing upon demand or upon the expiration of the agreed term.
    • Not to use the thing without the depositor’s permission (Article 1977), except:
      • When authorized by the depositor.
      • In cases of preservation where use is necessary.
    • To be liable for losses or damages caused by negligence or unauthorized use.

  2. Obligations of the Depositor:

    • To reimburse the depositary for expenses incurred in preserving the thing (Article 1978).
    • To indemnify the depositary for losses suffered due to the deposit, unless such losses are due to the depositary's fault.

VI. Subject Matter

  1. Things that can be Deposited:

    • Movable property: Always subject to deposit.
    • Immovable property: Subject to judicial sequestration only.

  2. Deposits of Fungible or Consumable Goods:

    • When the deposit involves fungible goods (e.g., money), it is called an irregular deposit (Article 1980). The depositary can use the goods but is obligated to return an equivalent of the same quantity and quality.

VII. Termination of the Deposit

  1. By Demand for Return:

    • The depositor may demand the return of the thing at any time unless a specific term was agreed upon (Article 1988).

  2. By Fulfillment of Purpose or Term:

    • The deposit ends when the agreed term expires or the purpose for which the deposit was made is achieved.

  3. By Loss or Destruction of the Thing:

    • If the thing deposited is lost or destroyed without the fault of the depositary, the deposit is extinguished.

  4. By Agreement of the Parties:

    • Parties may mutually agree to terminate the deposit at any time.

VIII. Judicial and Necessary Deposits

  1. Judicial Deposits:

    • May involve things seized in judicial proceedings.
    • Governed by court orders and procedural rules.

  2. Necessary Deposits:

    • Arise due to emergencies like fire, theft, or natural calamities (Article 1996).
    • Involve implied consent due to the urgency of the situation.

IX. Irregular Deposit (Article 1980)

  1. Definition:

    • Deposit involving fungible goods like money, where the depositary is allowed to make use of the goods but must return an equivalent amount or quality.

  2. Nature:

    • Treated as a loan for legal purposes, but the primary intent remains safekeeping.

  3. Implications:

    • Depositary becomes a debtor rather than a mere custodian.

X. Special Rules and Applications

  1. Compensation (Article 1991):

    • The depositary may retain the thing until reimbursement of necessary expenses incurred in its preservation.

  2. Multiple Depositors (Article 1987):

    • If the same thing is deposited by different people, the depositary must retain the thing until their claims are settled, unless one presents a valid title.

  3. Deposits by Minors or Incapacitated Persons (Article 1992):

    • The depositary may only return the thing to the guardian or legal representative, except when the minor has independently managed their own property.

  4. Secrecy of Deposit:

    • Deposit contracts often involve confidentiality unless disclosure is required by law or public policy.

XI. Remedies

  1. For Depositor:

    • Demand return of the thing.
    • Sue for damages in case of negligence or unauthorized use by the depositary.

  2. For Depositary:

    • Claim reimbursement for necessary expenses.
    • Exercise retention rights over the deposited thing if unpaid.

This comprehensive understanding of the Civil Law provision on Deposit ensures that the principles, obligations, and remedies related to this credit transaction are adhered to in the Philippines.

Deposit | CREDIT TRANSACTIONS

CIVIL LAW: CREDIT TRANSACTIONS

B. Deposit

Under Philippine law, Deposit is a credit transaction governed by the provisions of the Civil Code (Articles 1962-2009). It involves the delivery of a thing by one party (the depositor) to another (the depositary) with the obligation of the latter to return the same upon demand or upon the fulfillment of the purpose of the deposit.

I. NATURE AND DEFINITION

  1. Deposit Defined (Article 1962):
    Deposit is a contract whereby a person (depositor) delivers a thing to another (depositary) for safekeeping, under the obligation of the latter to return it when requested or after a specified period.

  2. Kinds of Deposit:
    a. Judicial Deposit (Sequestration):

    • Ordered by a court in a case where property is subject to litigation.
    • Governed by the rules of court.
    • Articles 2005-2009 of the Civil Code provide limited guidance.

    b. Extrajudicial Deposit:

    • Voluntarily constituted by agreement between parties.
    • Divided into: i. Voluntary Deposit (Article 1966): Arises from the agreement of the depositor and depositary.
      ii. Necessary Deposit (Article 1996): Constituted by law or due to urgent circumstances.

II. ELEMENTS OF A DEPOSIT

  1. Delivery: The actual physical transfer of possession of the object to the depositary.
  2. Purpose: Safekeeping of the thing, not its use.
  3. Obligation to Return: The depositary must return the same object upon demand or upon fulfillment of the deposit's purpose.

III. RULES GOVERNING EXTRAJUDICIAL DEPOSIT

A. Voluntary Deposit (Articles 1966-1995)

  1. Parties:

    • Depositor: Must have capacity to contract.
    • Depositary: Can be any person capable of holding possession.

  2. Obligations of the Depositary:
    a. Safeguard the thing with due diligence (Article 1972).
    b. Not use the thing without the depositor's consent (Article 1977).
    c. Return the identical thing upon demand, with accessories or fruits (Article 1983).

  3. Rights of the Depositary:
    a. Retain the deposit for expenses or losses incurred (Article 1994).
    b. Compensation for extraordinary expenses (Article 1973).

  4. Loss of Thing Deposited:
    a. Depositary is not liable if the loss is due to fortuitous events unless:

    • He expressly assumed responsibility (Article 1979).
    • The thing is delivered sealed or closed, and the seal is broken (Article 1981).

B. Necessary Deposit (Articles 1996-2004)

  1. Concept:
    A deposit made:

    • In compliance with a legal obligation.
    • On account of an emergency (e.g., fire, earthquake).

  2. Rules for Hotelkeepers (Articles 1998-2004):

    • Hotelkeepers are liable for loss of personal property of guests, unless: a. Due to force majeure.
      b. The guest's negligence contributed to the loss (Article 2000).
    • Exclusion of liability is not allowed through stipulation (Article 2003).
    • Hotelkeeper's liability extends to loss caused by employees or other guests (Article 2001).

  3. Compensation for the Depositary:

    • Necessary deposit allows for reasonable compensation for the depositary's efforts and expenses.

IV. JUDICIAL DEPOSIT (SEQUESTRATION) (Articles 2005-2009)

  1. Concept:

    • Constituted by virtue of a court order to preserve property in litigation.
    • Custody is placed with a designated depositary (often a third party).

  2. Characteristics:

    • Involves property subject to conflicting claims or pending litigation.
    • Custodian must act according to the court's instructions.

  3. Obligations of the Judicial Depositary:

    • To comply strictly with court orders.
    • To return the thing upon resolution of the case.

V. SPECIAL RULES AND NOTES

  1. Objects of Deposit (Article 1966):

    • Deposit may involve movable or immovable property, though the rules generally apply to movables.

  2. Depositor's Ownership Not Required:

    • A depositor does not need to be the owner of the thing deposited, provided they have the right to deliver it.

  3. Breach of Deposit Contract:

    • Failure to return the thing upon demand may give rise to liability for damages and possibly criminal liability under Estafa (Article 315, Revised Penal Code).

VI. TERMINATION OF DEPOSIT

  1. Fulfillment of the purpose or expiration of the term.
  2. Demand by the depositor for the return of the object.
  3. Mutual agreement between the parties.
  4. Fortuitous loss or destruction of the object.

By understanding these provisions, parties can navigate the nuances of deposit agreements and safeguard their interests under Philippine law.

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