Primer on Credit Transactions

UP BarOps 2002

I.

INTRODUCTION

A. MEANING AND SCOPE OF CREDIT TRANSACTIONS credit: ability to borrow money or things by virtue of the trust reposed by a lender that the borrower may pay what he promised within a specified period credit transactions: all transactions involving the purchase or loan of goods, services or money in the present with promise to pay or deliver in the future types: SECURE ! supported by a collateral or encumbrance of property "real # there is need for delivery$ U%SECURE ! supported only by a personal commitment of another "personal, e&. guaranty or suretyship$ '. SECURITY AND BAILMENT CONTRACTS securit : something given, deposited or serving as a means to ensure the fulfillment or enforcement of a principal obligation !ai"#ent: the delivery of property by one person to another in trust for a specific purpose, with a contract that the trust shall be faithfully e&ecuted and the property returned or duly accounted for when the special purpose is accomplished or (ept until the bailor reclaims it parties: 'A)*+R ! the giver, the party who delivers the possession or custody of the thing bailed 'A)*EE ! the recipient, the party who receives the possession or custody of the thing thus delivered (inds: sole benefit of the bailor ! gratuitous deposit or mandatum sole benefit of the bailee ! commodatum or mutuum "simple loan$ benefit of both parties ! deposit for compensation, pledge, bailment for hire II. LOAN contract o$ "oan "Art. %&''$: one of the parties delivers to another: something not consumable so that the latter may use the same for a certain time and return it "C+--+ A.U-$ money or other consumable thing, upon the condition that the same amount of the same (ind and /uality shall be paid "S)-0*E *+A% +R -U.UU-$ a REA* C+%.RAC. # not perfected until the delivery of the ob1ect of the contract this is in view of the purpose of the contract which is to transfer either the use or the ownership of the thing loaned however, an accepted promise to deliver something by way of commodatum or simple loan is a consensual contract, binding upon the parties " Art. %&'($ Saura I#)ort and E*)ort Co. +. DBP 2here an application for a loan of money was approved by resolution of the defendant

corporation and the corresponding mortgage was e&ecuted and registered, there arises a perfected consensual contract of loan. Bonne+ie +. CA )n this case, the mortgage was e&ecuted for and on condition of the loan granted to the *o3ano spouses. .he fact that the latter did not collect from the respondent ban( the consideration of the mortgage on the date it was e&ecuted is immaterial. .he herein contract of loan was e&ecuted at the same time the contract of mortgage was e&ecuted. .he promissory not e&ecuted is only an evidence of indebtedness and does not indicate lac( of consideration of the mortgage at the time of its e&ecution. A. COMMODATUM 4. Nature o$ Co##odatu# "Art. %&',$ 4 bailee ac/uires the use of the thing loaned, but not its fruits however, under Art. %&(-, a stipulation that the bailee may ma(e use of the fruits of the thing loaned is valid the en1oyment of the fruits must only be incidental to the use of the thing loaned, if it is the main cause, the contract may be one of usufruct 5 ESSE%.)A**6 7RA.U).+US, contract ceases to be a commodatum if any compensation is to be paid by the bailee "in such a case, there arises a lease contract$ 8 purpose of the contract must be the temporary use of the thing loaned, if the bailee is not entitled to the use of the thing, the contract may be a deposit 9 bailor need not be the owner of the thing loaned "Art. %&'.$ since ownership does not pass to the borrower however, the bailee may not lend nor lease the thing loaned to him to a 8 rd person "Art. %&'&/01$ 0URE*6 0ERS+%A* in character "Art. %&'&$ 4$ death of either the bailor or the bailee e&tinguishes the contract 5$ bailee can neither lend not lease the ob1ect of the contract to a 8 rd person, but members of the bailee:s household may ma(e use of the thing loaned, unless: there is a stipulation to the contrary the nature of the thing forbids such use Art. 4;8; constitutes an e&ception to the general rule that all rights ac/uired in virtue of an obligation are transmissible "Art. 44<=$ Re)u!"ic +. CA .he transient possession of the US %avy of the owner:s land for >< years parta(es of the character of a commodatum. )t does not militate against the title of the owner. +ne:s ownership of a thing may be lost by prescription by reason of another:s possess if such possession be under claim of ownership, not where the possession is only intended to be transient. SU'?EC. -A..ER +@ C+--+ A.U- "Arts. %&'2 and %&'3$: generally, non!consumable goods consumable goods may be the sub1ect of commodatum if the purpose is not the consumption of the ob1ect, i.e. it is for e&hibition may be movable or immovable property Mina +. Pascua" An e&ample of commodatum involving real property is when a person allowed another to build a warehouse on the former:s land so that the latter may use the property for a certain period without any payment of rentals. )f no time for the use of the land is specified, the contract would be that species of commodatum called precarium e&pressly recogni3ed in Article 4;9<. )f rental is paid,

the contract would be one of lease. 5. O!"i4ations o$ t5e Bai"ee a. .o 0A6 for the +R )%AR6 EA0E%SES for the USE and 0RESERBA.)+% of the thing loaned "Art. %&(%$ b. *)A'*E for the *+SS of the thing, though loss is through a fortuitous event, if: 4$ he devotes the thing to any purpose different from that for which it has been loaned 5$ he (eeps it longer than the period stipulated, or after the accomplishment of the use for which the commodatum has been constituted 8$ the thing loaned has been delivered with appraisal of its value, unless there is a stipulation e&empting the bailee from responsibility in case of a fortuitous event 9$ he lends or leases the thing to a 8rd person, who is not a member of his household >$ he chose to save his own thing, instead of saving the thing borrowed " Art. %&(0$ 7E%. RU*E: bailee is %+. *)A'*E for loss or damage due to a fortuitous event since the bailor retains ownership of the thing loaned Art. 4;95 specifies the instances when the general rule will not apply De Los Santos +. 6arra )n a contract of commodatum whereby one of the parties delivers to the other a thing that is not perishable, to be used for a certain time and afterwards returned, it is the imperative duty of the bailee, if he should be unable to return the thing to the owner, to pay damages to the latter, if through the fault of the bailee the thing loaned was lost or destroyed. c. %+. *)A'*E for the E.ER)+RA.)+% of the thing loaned, if deterioration is: 4 due only to the use thereof 5 without the bailee:s fault "Art. %&('$

d. CA%%+. RE.A)% the thing loaned on the ground that the bailor owes him something, even though it may be by reason of e&penses "Art. %&(($ bailee has right of retention for A-A7ES suffered under Art. %&,%, when the bailor does not advise the bailee of the flaws of the thing loaned, such flaws being (nown to the bailor Cat5o"ic 7icar A)osto"ic +. CA .he Catholic Bicar Apostolic of the -t. 0rovince was in possession as borrower in commodatum when it repudiated the trust by declaring the properties in its name for ta&ation purposes. .he SC held that the bailee in this case did not meet the re/uirement of possession for ac/uisitive prescription since its failure to return the thing loaned did not mean adverse possession. e. S+*) AR6 *)A')*).6 when there are 5 or more bailees in the same contract " Art. %&(,$ an e&ception to the general rule that the concurrence of 5 or more parties in the same obligation gives rise only to a 1oint obligation '. O!"i4ations o$ t5e Bai"or a. CA%%+. E-A% RE.UR% of the thing loaned until after: e&piration of the period stipulated accomplishment of the use for which the commodatum has been constituted "Art. %&(2$ Cowever, the bailor may demand return of the thing if: he should have urgent need of the thing "in this case, the contract of

commodatum is suspended while the bailor is in possession of the thing$ " Art. %&(2$ the contractual relation is a )recariu#, in which case bailor may demand the thing at will "Art. %&(3$ where neither the duration of the contract nor the use of the thing loaned is stipulated where the use of the thing is merely tolerated by the owner the bailee commits any act of ingratitude under Art. <D> " Art. %&(.$ this is because the contract of commodatum, li(e a donation, is essentially gratuitous c. RE@U% EA.RA+R )%AR6 e&penses for the 0RESERBA.)+% of the thing provided the bailee brings the same to the (nowledge of the bailor before incurring them e&cept when they are so urgent that reply to the notification cannot be awaited without danger "Art. %&(&$ if the e&traordinary e&penses "caused by fortuitous event$ arise on the occasion of the actual use of the thing, they shall be borne EEUA**6 by the bailor and bailee: even though the bailee acted without fault unless there is a stipulation to the contrary 'ailee not entitled to reimbursement for e&penses other than those referred to in Arts. 4;94 and 4;9;, for the purpose of ma(ing use of the thing " Art. %&,-$. c. *)A')*).6 to 0A6 A-A7ES for (nown hidden flaws "Art. %&,%$ in case the bailor does not advise the bailee of the (nown hidden flaw bailee must suffer damages by reason of said flaw or defect .he bailor cannot e&empt himself from the payment of e&penses or damages by abandoning the thing to the bailee "Art. %&,0$. this is because the value of e&penses or damages may e&ceed the value of the thing loaned

B. SIMPLE LOAN OR MUTUUM 4. Nature o$ Si#)"e Loan or Mutuu# "Art. %&,'$ borrower ac/uires ownership of money or other fungible thing loaned 8 $un4i!"e: things which are usually dealt with by number, weight or measure so that any given unit or portion is treated as the e/uivalent of any other unit or portion borrower is bound to pay to the creditor an e/ual amount of the same (ind and /uality 2here by the contract one person transfers ownership of %+%!@U%7)'*E things to another and the latter is obliged to give things of the same (ind, /uantity and /uality, the contract shall be considered a 'AR.ER "Art. %&,($ #utuu# sub1ect matter is money or any other fungible thing may be gratuitous !arter sub1ect matter is non! fungible thing an onerous contract, a mutual sale

To"entino +. Gon8a"e8 )n this case, the Court distinguished between a contract of loan and a contract of lease. A loan is an advancement of money, goods, or credits upon a contract of stipulation to repay, not to return, the thing loaned on some future day in accordance with the terms and conditions of the contract. .he moment the contract of loan is completed, the thing sub1ect of the contract ceases to be the property of the former owner and becomes the property of another to be used according to his own will, unless the contract e&pressly provides for its specific use. +n the other hand, in a contract of lease, the owner of the property does not lose his ownership. Ce simply uses control over the property rented during the contract period. Gro)o Grocer +. Paci$ic Coast Biscuit Co. .he so!called current account and savings deposit lost their character as deposits, and are converted into simple commercial loans because, in cases of such deposits, the ban( has made use thereof in the ordinary course of its transaction as an institution engaged in the ban(ing business, not because it so wishes, but precisely because of the authority deemed to have been granted to it by the depositors to enable them to collect the interest which they had been and they are now collecting, and by virtue further of the authority granted to it by the Corporation *aw and 'an(ing *aw. .he ban( ac/uired ownership of the money deposited. -oreover, payment of interest only ta(es place in case of loans. 5. For# o$ Pa #ent "Art. %&,,$ a. -+%E6 payment must be made in the currency which is legal tender in the 0hilippines "Art. 459;$ in case of e&traordinary inflation or deflation, the basis of payment shall be the value of the currency at the time of the creation of the obligation "Art. 45>F$ b. @U%7)'*E .C)%7 borrower is under obligation to pay the lender another thing of the same (ind, /uality and /uantity in case this is impossible to do, the borrower shall pay its value at the time of the perfection of the loan '. Interest 7E%. RU*E: %o interest shall be due. "Art. %&,2$ EACE0.)+%S: if agreement to pay interest is e&pressly stipulated and is in writing " Art. %&,2$ the interest must be lawful, i.e. it is not usurious " Art. %&,3$, however, laws on usury have been suspended indemnity for damages # the debtor in delay is liable to pay legal interest even in absence of stipulation "Art. 55F;$ interest due shall earn legal interest from the time it is 1udicially demanded although the obligation may be silent upon this point "Art. 5545$ San4rador +. 7a"derra#a 2here no interest was e&pressly stipulated, although a hidden interest was incorporated in the principal amount, the court ordered the payment of 45G interest per annum. Eastern S5i))in4 Lines +. CA 2ith regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest would be imposed as follows: "a$ obligation breached, payment of sum of money "forbearance of money or loan$, that stipulated, in the absence of which 45G computed from default, "b$ the obligation not constituting loan or forbearance of money, interest imposed at the discretion of the court at the rate of DG per annum, "c$ when 1udgment awarding

sum of money becomes final and e&ecutory, rate is 45G per annum, interim period deemed e/uivalent to a forbearance or credit. 6a+ier +. De Gu8#an 2hile the Usury *aw is now legally ine&istent, when the interest charged is e&orbitant and unconscionable, the courts may provide relief to the borrower. 4 4 if interest is payable in (ind, its value shall be appraised at the current price of the products or goods at the time and place of payment " Art. %&,.$

)f the borrower pays interest when there has been no stipulation therefore, the provisions concerning solutio indebiti or natural obligations shall be applied "Art. %&2-$. where unstipulated interest is paid by mista(e, the debtor may recover "Art. 54>9$ where unstipulated interest is paid voluntarily because the debtor feels morally obliged to do so, there can be no recovery "Art. 495>$ co#)ounded interest: interest due and unpaid shall be added to the principal obligation and the resulting total amount shall earn interest 7E%. RU*E: accrued interest shall not earn interest EACE0.)+%S: when 1udicially demanded "Art. 5545$ when there is an e&press stipulation made by the parties "Art. %&,&$ Cu Un9ien4 +. Ma!a"acat Su4ar Co. A stipulation to the effect that interest shall be at the rate of 45G per annum payable at each month upon the unpaid capital of the loan, does not authori3e the compounding of interest payment at intervals of one month. 2here interest charged is usurious, the mere voluntary payment of it to the creditor by the debtor is not binding. )n the absence of e&press stipulation for the accumulation of compound interest, no interest can be collected upon interest until the debt is 1udicially claimed. co##odatu# sub1ect matter is ordinarily something not consumable ownership of thing loaned is retained by the lender essentially gratuitous borrower must return the same thing loaned may involve real or personal property loan for use bailor may demand return of the thing loaned before the e&piration of the term in case of urgent need loss is generally borne by the bailor since he #utuu# sub1ect matter is money or other consumable thing ownership is transferred to the borrower may be gratuitous or onerous "wH stipulation to pay interest$ borrower need only pay the same amount of the same (ind and /uality refers only to personal property loan for consumption the lender may not demand its return before the lapse of the term agreed upon borrower suffers the loss

is the owner III. DEPOSIT A. DEPOSIT IN GENERAL de)osit "Art. %&20$: constituted from the moment a person receives a thing belonging to another with the obligation of: 4 safely (eeping it, and 5 returning the same )f safe(eeping of the thing delivered is not the principal purpose of the contract, there is not deposit but some other contract "Art. %&20$. a REA* C+%.RAC. # deposit is not perfected until the delivery of the thing but an agreement to constitute a deposit is binding "Art. %&2'$ may be constituted 1udicially or e&tra1udicially " Art. %&2($ it is a 1udicial deposit or se/uestration when an attachment or sei3ure of property in litigation is ordered e&tra1udicial deposit is either voluntary or necessary " Art. %&23$ a generally 7RA.U).+US C+%.RAC. , unless: there is an agreement to the contrary the depositary is engaged in the business of storing goods "Art. %&2,$ sub1ect matter covers only movable things "Art. %&22$ however, 1udicial deposit may cover movable as well as immovable property its purpose being to protect the things of parties to a suit " Art. 0--2$ de)osit principal purpose is safe(eeping depositor can demand the return of the sub1ect matter at will both movable and immovable property "in case of 1udicial deposit$ may be the ob1ect de)osit principal purpose is safe(eeping may be gratuitous '. 7OLUNTARY DEPOSIT %. Genera" Pro+isions +o"untar de)osit "Art. %&2.$: delivery is made by the will of the depositor delivery made by 5 or more persons each of whom believes himself entitled to the thing deposited with a 8rd person 8rd person shall deliver it in a proper case to the one to whom it belongs contract may be entered into orally or in writing "Art. %&2&$ E@@EC. +@ )%CA0AC).6 a. of the E0+S).+R "Art. %&3-$ #utuu# principal purpose is consumption the lender must wait until the e&piration of the period granted only money and other fungible things may be the ob1ect

co##odatu# principal purpose is the transfer of the use essentially and always gratuitous

depositary shall be sub1ect to all the obligations of a depositary depositary may be compelled to return the thing by the guardian or administrator of the depositor or by the depositor himself if he should ac/uire capacity b. of the E0+S).AR6 "Art. %&3%$ depositary does not incur the obligations of a depositary depositary is liable to return the thing deposited while still in his possession depositary may be compelled to pay the depositor the amount by which he may have benefited himself with the thing or its price sub1ect to the right of any 8 rd person who ac/uired the thing in good faith depositor may bring an action against a 8rd person who ac/uires the thing in bad faith 5. O!"i4ations o$ t5e De)ositar a. to IEE0 the thing SA@E and RE.UR% it when re/uired, to the depositor, his heirs and successors, or any person who may have been designated in the contract " Art. %&30$ responsibility of depositary with regard to the safe(eeping and loss of the thing is governed by Arts. 45D5 to 45D; 4 he is liable if the loss occurs through his fault or negligence 5 defenses available: diligence of a good father of a family, fortuitous event degree of care is greater is the deposit is for compensation than when it is gratuitous if the depositor should lose his capacity to contract after having made the deposit, the thing cannot be returned e&cept to the persons who may have the administration of his property and rights "Art. %&.2$ b. %+. to E0+S). the thing with a 8R 0ERS+%, unless there is a stipulation to the contrary "Art. %&3'$ if deposit with a 8rd person is allowed, the depositary is liable for the loss if he deposited the thing with a person who is manifestly careless or unfit depositary is responsible for the negligence of his employees c. may CCA%7E .CE 2A6 of the E0+S). under circumstances he may reasonably presume that the depositor would consent to the change if he (new of the facts of the situation "Art. %&3($ depositary must first notify the depositor and wait for the latter:s decision before effecting the change 4 re/uirement of prior notice may be dispensed with if the delay would cause danger

d. to C+**EC. )%.ERES. on CC+SES )% AC.)+% deposited "Art. %&3,$ where the depositary is holding certificates, bonds, securities, or instruments which earn interest depositary is also bound to ta(e such steps necessary in order that the securities may preserve their value and rights corresponding to them provision does not apply to contracts for the rent of safety deposit bo&es "bailment for hire, a special (ind of deposit$ e. may C+--)%7*E 7RA)% or articles of the SA-E I)% A% EUA*).6 " Art. %&32$ unless there is a stipulation to the contrary the various depositors shall own or have a proportionate interest in the mass f. %+. to -AIE USE of the .C)%7 E0+S).E "Art. %&33$ unless: 5 there is e&press permission of the debtor

the preservation of the thing deposited re/uires its use, but it may only be used for that purpose breach of this obligation shall render the depositary liable for damages irre4u"ar de)osit: when the depositary has permission to use the consumable thing or money deposited but safe(eeping is still the principal purpose 9 if the thing deposited is non!consumable and the depositary has permission to use the thing, the contract is converted to one of commodatum " Art. %&3.$ > if the thing deposited is money or other consumable thing, the permission given and the consumption converts the contract into a simple loan " Art. %&3.$ D permission to use is not presumed but must be proven "Art. %&3.$ Co#)ania A4rico"a de U"tra#ar +. Ne)o#uceno .here are points of difference between a loan and an irregular deposit. )n an irregular deposit, the only benefit is that which accrues to the depositor, while in a loan the essential cause for the transaction is the necessity of the borrower. Also, in an irregular deposit, the depositor can demand the return of the article at any time, while a lender is bound by the provisions of the contract and cannot see( restitution until the time for payment has arisen. g. *)A'*E for the *+SS of the thing through @+R.U).+US EBE%. if: it is stipulated he uses the thing without the depositor:s permission he delays its return he allows others to use it, even though he himself may have been authori3ed to use the same "Art. %&3&$ h. in case the thing deposited is delivered C*+SE and SEA*E " Art. %&.%$ 4 the depositary must return it in the same condition 5 depositary is liable for damages should the seal or loc( be bro(en through his fault fault of the depositary is presumed unless there is proof to the contrary statement of the depositor as to the value of the thing deposited shall be accepted, however, the courts may pass upon the credibility of the depositor with respect to the value claimed by him 8 depositary is liable to (eep the secret of the deposit when the seal or loc( is bro(en with or without his fault 9 depositary is authori3ed to open the thing deposited which is closed and sealed when: he is presumed to have authority "as where the (ey has been delivered to him$ such is necessary to carry out the instructions of the depositor "Art. %&.0$ i. to RE.UR% the thing deposited with all its 0R+ UC.S, ACCESS+R)ES and ACCESS)+%S "Art. %&.'$ 4 if the depositary be in delay or has used the money without permission, he shall be liable for interest "Art. 4=;D$ CA%%+. E-A% that the depositor 0R+BE +2%ERSC)0 of the thing deposited " Art. %&.($ 5 if the depositary discovers that the thing has been stolen and he (nows who the true owner is, he must advise the latter of the deposit if the owner does not claim the thing within 4 month from notice, the depositary shall be relieved of all responsibility by returning the thing deposited to the depositor 8 if the depositary has reasonable grounds to believe that the thing has not been lawfully ac/uired by the depositor, he may return the same

1.

(.

to RE.UR% the thing at the 0*ACE ES)7%A.E "Art. %&.3$ 4 e&penses for transportation shall be borne by the depositor 5 if no place is designated, it shall be made where the thing deposited may be, even if it should not be the same place where the deposit was made provided that there was no malice on the part of the depositary to RE.UR% the thing to the depositor U0+% E-A% , even though a specified period or time for such return may have been fi&ed "Art. %&..$ does not apply: when the thing is 1udicially attached while in the depositary:s possession should the depositary have been notified of the opposition of a 8 rd person to the return or removal of the thing deposited in these 5 cases, the depositary must inform the depositor of the attachment or opposition

l.

m. to RE.UR% the thing even 'E@+RE the .)-E ES)7%A.E , if he should have 1ustifiable reasons to do so "Art. %&.&$ unless the deposit is for a valuable consideration if the depositor refuses to receive the thing, the depositary may secure its consignation from the court n. to RE.UR% what he received by reason of loss through @+RCE -A?EURE or 7+BER%-E%. +R ER "Art. %&&-$ 4 in case the depositary:s heir, in good faith, sells the thing deposited, he shall be bound: to return the price received to assign his right of action against the buyer in case the price has not been paid "Art. %&&%$ in case of fi&ed, savings and current deposits of money in ban(s and similar institutions, the provisions concerning S)-0*E *+A% shall govern "Art. %&.-$ relation between depositor and ban( is that of creditor and debtor gen. rule is that a ban( can compensate or set!off the deposit in its hands for the payment of any indebtedness to it on the part of the depositor " Gu""as +. PNB$, in a true deposit, compensation is not allowed

Serrano +. CB A ban(:s failure to honor a deposit is failure to pay its obligation as debtor and not a breach of trust arising from a depositary:s failure to return the thing deposited. R)7C. +@ .2+ +R -+RE E0+S).+RS .+ E-A% .CE)R RES0EC.)BE SCARES " Art. %&.,$: 4 if the thing deposited is divisible and there are 5 or more depositors who are not solidary, each one can demand only his proportionate share 5 if there is solidarity or the thing does not admit of division: the provisions of Arts. 4545 "do anything useful, not pre1udicial$ and 4549 "return the thing to any solidary depositor e&cept if there has already been demand$ however, if there is a stipulation that the thing should be returned to one of the depositors, the depositary shall return it only to the person designated 8. O!"i4ations o$ t5e De)ositor a. to RE)-'URSE the depositary for EA0E%SES he may have incurred for the

0RESERBA.)+% of the thing deposited, if deposit is 7RA.U).+US " Art. %&&0$ b. to 0A6 for *+SSES arising from the CCARAC.ER of the thing, unless: 4 the depositor was unaware of, or was not e&pected to (now, the dangerous character of the thing, at the time of the constitution of the deposit 5 the depositor notified the depositary of the dangerous character of the thing 8 the depositary was aware of the dangerous character of the thing without advice from the depositor "Art. %&&'$ .he depositary may RE.A)% the thing in 0*E 7E until the @U** 0A6-E%. of what may be due him by reason of the deposit "Art. %&&($. 9. E*tin4uis5#ent o$ De)osit "Art. %&&,$ upon the loss or destruction of the thing deposited in case of gratuitous deposit, upon the death of either the depositor or depositary 4 in case of onerous deposit, the rights and obligations are transmitted to the heirs, however, the heirs of either party have a right to terminate the deposit even before the e&piration of the term .he causes in Art. 4;;> are not e&clusive, other causes can be found in Art. 4584 of the Civil Code "e&. novation, merger, etc.$. C. NECESSARY DEPOSIT 2CE% C+%S.).U.E : 4$ when it is made in compliance with a legal obligation " Art. %&&2$ governed by the provisions of the law establishing it, in case of its deficiency, by the rules of voluntary deposit "Art. %&&3$ e&amples: 1udicial deposit of a thing the possession of which is being disputed in litigation by 5 or more persons "Art. >8=$ deposit of a thing pledged when the creditor uses the same without the authority of the owner or misuses it in any other way " Art. 0%-($ those constituted to guarantee contracts with the government 5$ when it ta(es place on the occasion of any calamity, such as fire, storm, flood, pillage, shipwrec(, or other similar events "Art. %&&2$ regulated by the rules on voluntary deposit and by Art. 54D= "establishes a EUAS)! C+%.RAC. # owner is bound to pay another for saving his property from destruction$ 8$ deposit of effects made by travelers in hotels or inns "Art. %&&.$ to hold (eepers of hotels or inns responsible as depositaries, the following must concur: notice be given to them or their employees, of the effects brought guests ta(e the precautions which hotel(eepers or their substitutes advised relative to the care and vigilance of their effects liability e&tends to effects lost or damaged in the anne&es of the hotel " Art. %&&&$ responsibility of hotel(eepers shall include loss of, or in1ury to the personal property of guests caused by employees as well as strangers " Art. 0---$ hotel(eepers are not liable when: the loss or in1ury is caused by force ma1eure "Art. 0---$ the act of a thief or robber, who has entered the hotel, is not deemed force ma1eure unless it is done with the use of arms or through irresistible force " Art.

0--%$ the loss is due to the acts of guests, his family, servants or visitors " Art. 0--0$ the loss arises from the character of the things brought into the hotel " Art. 0--0$ hotel(eeper has a right to retain the things brought into the hotel as a security for credits on account of lodging and supplies "Art. 0--($

.he hotel(eeper cannot suppress or diminish liability by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation to the contrary shall be void "Art. 0--'$. . SE:UESTRATION OR 6UDICIAL DEPOSIT ta(es place when an attachment or sei3ure of property in litigation is ordered " Art. 0--,$ 4 purpose is to maintain the status /uo during the pendency of litigation 5 Rule >< "Rules of Court$: properties may be attached by the sheriff upon the filing of a complaint 8 Rule >; "R+C$: appointment of a receiver for the preservation of property in litigation 9 Rule DF "R+C$: personal property is sei3ed in suits of replevin ob1ect may be movable or immovable property "Art. 0--2$ +%ER+US # always remunerated +'*)7A.)+% +@ .CE E0+S).AR6: to ta(e care of the property with the diligence of a good father of a family " Art. 0--.$ may not be relieved of his responsibility until the litigation is ended or the court so orders " Art. 0--3$ As to matters not provided for in the Civil Code, 1udicial se/uestration shall be governed by the Rules of Court "Art. 0--&$.