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LOAN

Commodatum - non consumable thing that you allowed other persons to use.

- There is a non-consumable thing that the bailor allowed the bailee to use.
- Gratuitous.
- No compensation.

Parties:

1.) Bailee- borrower

2.) Bailor-owner

Obli of the bailee: To return the same thing

Special specie of commodatum:

PRECARIUM- where the bailor can demand for the immediate return of the thing loaned at once when
there is urgent need because the use is merely tolerated and the period has not been agreed upon.

GR: only non consumable thing can be the object of commodatum.

EXC: consumables may be obj of commodatum for exhibition purposes only.

Mutuum- simple loan of money.

-borrowing of money or any consumable thing.

Obli of bailee: not to return the same amount of money.

-agreement to pay interest may be done orally, however, to be able to collect the interest, it must be in
writing.

- if consumable, it should be same kind, quality and quantity.

Real contract

- needs delivery for the perfection of the contract.

- Commodatum
- Mutuum
- Pledge
- Deposit
- Consensual (sale, lease)
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COMMODATUM MUTUUM
Non consumable; can be consumable but for Consumable; loan of money
display purposes only
Essentially gratuitous; no compensation, no May be gratuitous or onerous due to payment
money of money.
Must return the same thing that was borrowed Borrower need not return the same money or
consumable thing, only return the same
amount
May involve real or personal property Personal property only;always
Loan for use or temporary possession Loan for consumption
may demand for the return of the thing before There is a period that must lapse before
the expiration (PRECARIUM) demanding the return of the thing
Loss of the thing is suffered by the bailor bec Loss is suffered by the bailee bec he becomes
owner is still the bailor the owner of the thing
Purely personal in character.
Death of either party extinguishes the Bailee can neither lend nor lease the thing
obligation. in such case, the bailee should borrowed. EXCEPT members of bailee’s
return the thing to the household may use the thing borrowed.
EXCEPTION TO THE EXCEPTION if there was a
that even members of the household cannot
use the thing borrowed or the nature of the
thing borrowed fobids the use by another
person.

Obligations of the bailee:

1.) Pay for the ordinary expenses for the use and preservation of the thing
2.) Liable for the loss of the thing cause by fortuitous event (THIS IS PROVIDED BY LAW)

Circumstances where bailee is liable for loss of thing due to fortuitous event:
1.) If he devotes the thing to other uses different from the purpose intended
2.) Keeps it longer than period stipulated (i.e use for a day but used it for a week and an
accident occurred)
3.) Leasing or lending the thing to a third person not a member of his household
4.) If being able to save the thing borrowed or his own property, he chose to save his own
property
5.) If the thing loaned has been delivered with an appraisal value.

GR: no one is liable for fortuitous event.

EXC:
1.) if the law so provides
2.) if the stip of the parties expressly so provides
3.) If the nature of the obli requires assumption of risk
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Obligations of the bailor:

1.) Refund extraordinary expenses for the thing loaned. As a general rule, the obligation is on the
part of the bailor who is the owner for the ordinary expenses. Now if the bailee has already
advanced the money for the extraordinary expenses, the bailor must refund to the bailee the
extraordinary expenses, provided that the bailee must bring to the attention of the bailor the
need for the extraordinary expenses before incurring them. Note however, that should the
deterioration occurred during the use, the bailor is to refund only half of the price. EXCEPTION
TO THE EXCEPTION: bring the same to the knowledge of the bailor but it is so urgent that it
needs immediate attention.
2.) Art.1951 FLAWS AND DEFECTS : Indemnify the bailee for the damages or flaws by the same if
the bailor knew of the flaws and did not inform the bailee of the same. REMEDY OF BAILEE: as a
general rule, the bailee cannot retain the obj of commodatum only be the bailor owe him
something bec he is not the owner and later on has the obligation to return the thing.
EXCPETION: for any injury or damage to you.
3.) 1952: bailor cannot exempt himself from paying the damages and expenses by abandoning the
same to the bailee. Bailor needs to pay and indemnify the bailee and get the property later on.

Mutuum

Principles:

1.) You cannot collect interest unless it is in writing. No interest shall be due unless it has been
expressly stipulated in writing.
2.) 1959, interest due and unpaid shall not earn interest. However, the contracting parties, may by
stipulation, capitalize the interest due and unpaid, which as added principal shall earn interest.
This is known as COMPOUNDING OF INTEREST. It is more onerous on the part of the debtor.
3.) 2212 interest due shall earn interest from the time it is judicially demanded. 12% for
forbearance of money. 6% for others. Go to court for them to award the legal interest.