Kinds of 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.

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